INTERNATIONAL TRADE.

Lyttelton Times, Volume LXII, Issue 7350, 19 September 1884, Page 3

INTERNATIONAL TRADE.

TO THE EDITOR. Sir, — I am surprised that Mr Chrystall should have failed to apprehend that my intention was not to draw an economic comparison between (Egypt and 'this Colony, but to show that Egypt is in a better position financially, at the present time, than New Zealand is. After I have said that Now Zealand has altogether the finest resources in the world ho ought to have seen that I admit of no such comparison. Ido not say that (regarding the future) she is necessarily in a worse position than Egypt is, but I contend that if our resources are not sufficiently developed to bring about a balance of exports over imports sufficient to |pay the interest on our debt, and wo consequently continue to borrow, wo must inevitably become as downtrodden as Egypt is. I am referred to a previous letter for the solution of this problem. I presume to that part whore wo aro told that Now Zealand, having borrowed much money, “is a separate question from the matter of imports and exports,” Now, Sir, I thought this was so dearly absurd that it needed no answer from mo, for instead of being separate they aro so intimately allied that the one is tho direct cause of tho other, ns I showed in my first letter.

If you ovor-spond your income you must borrow. This is how our private debt has been contracted. In consequence of this over-spending, wo wore not able to contribute to Government sufficient to meet its expenses, and to construct public works Hence the Government borrowing began. Part of the capital they borrowed flowed into this country in the shape of materials, the other part in coin j but this also was distributed, by way of tho labouring classes, among tho general public, and has been expended, as before, in importing and jurying interest on debt. If Mr Chrystall will look into tho Financial Statement, which apppars in your issue of yesterday, ho will see that, if the Government wore to borrow 451,578,799 this year, not one penny of that would come into this Colony, neither as imports nor in coin, except it comes to bo immediately returned j for he will see that exactly that amount is required to pay interest and sinking fund on the money already borrowed by the Government, ana, therefore, could not bo applied to the construction of public works. Practically, it is the revenue which would bo applied to the purpose. Had there been no over-importing, there could havo_ been no debt, or, if sufficient capital had flowed into tho country with intending settlers to pay for tho excess of imports, there would

liaro boon no debt. My opponent, while observing that capital flows in with settlers, Hcoins to forget that it likewise flows out with those that retire. This is why 1 did no t previously observe the matter, but, in calculating the sources of income, allowed it to slip out. Had not the amount flowing in and flowing out been about equal, there would have been some appreciable difference in the actual indebtedness of the Colony, and what the excess of imports with interest combined have already cost; but there is not. As to capital coming for permanent investment, while its owner resides, abroad it is just as much an obligation ns if it were borrowed. Thus the total indebtedness of the Colony, together with the moneys invested by absentees, amounts to upwards of .£70,000,000, exactly the sum I calculated,

Hut it is said I have "yet to learn that the relation between imports and exports may mean totally different things." Now why is such subtlety used to evade the point, I ask ? Docs it mean, or can it mean, anything different in this Colony ? I am also charged with overlooking the tangible assets that New Zealand has to represent her debt. I may hero inform Mr Chrystall that had I not been obliged to cut down tny first letter for want of space in your columns, this point would have been dealt with. But of what value would it have been to him? Do the assets decrease our obligations? No one ought to know better than he should that if the assets were required it would mean utter ruin to the country. If, however, ho means that in the assets we have the equivalent of the money borrowed, I say we have nothing we should not have had without borrowing one shilling, had the industries of the Colony been fostered as they should have been.

Further, he says that " good nature is always the truest philosophy.” lam not a philosopher, but to my mind this is obviously untrue. Suppose England to enrich America and starve her own people (which she has done) do you call that the truest philosophy ? Ido not think so. It may be the truest philanthropy, but there is no philosophy in it. I might say more on this point, but I must apologise for having already taken up so much of your space. —I am, &c., C, MUNDY. Sept. 17.