HEAVY-LADEN NEW ZEALAND.

New Zealand Herald, Volume XXIX, Issue 9044, 24 November 1892, Page 6

HEAVY-LADEN NEW ZEALAND.

THE AGENT-GENERAL IN REPLY. [from our own CORRESPONDENT. J

London, October 14. Mr. A. J. Wilson's calumnies about New Zealand in the August number of the " Investors' Review" have had a lohg sbart, and a stern chase is proverbially slow, bub Mr. Westby Perceval has undertaken ib with all possible speed, and his roply to "Heavyaden New Zealand" is already written, and will appear shortly in the magazine of which Mr. Wilson is editor. I have been favoured with a perusal of the MS., and have no doubt that the Agent-General's able and patriotic defence of his colony will prove interesting. * He writes with a moderation which is effective, bub makes his points with a neatness which will be duly appreciated by tho reader. Mr. Perceval admits at the outset that the tone of the article " Heavy-laden New Zealand" can hardly be said to be either unfriendly or malicious, which makes it all the more necessary to reply to the charges hurled with such energy at the colony. Ib is a mixture of truth, fiction, and false conclusions, and a hesitation is often displayed as to whether praise or blame shall be bestowed. One is rather induced, observes Mr. Perceval, to believe that the writer would have preferred to bless rather than curse the colony had his conscience so permitted. Intending to write a series of articles on the Australasian colonies, it would appear as if he had first burned his eyes to New Zealand in the hope of being able to hold that colony up as a pattern for the rest of Australasia in proof of what a policy of thrift, industrial enterprise, and abstinence from borrowing could accomplish ; bub had, nevertheless, been reluctantly compelled to conclude instead that New Zealand was borrowing on the sly—in a critical condition financially, and in a precarious position industrially. In offering some comments on the article in Question, Mr. Perceval said he should eneavour to show that the startling assertions therein contained are without foundation, and the conclusions entirely false. Recognising the impossibility of devoting time to answering all tho charges scattered throughout the article, the Agent-General contented himself with selecting eight of the most important as "sufficient in all conscience." To the first count in the indictmenb, that Now Zealand has in the past borrowed money which she really did nob want, and could not altogether profitably use, he pleaded " not guilty." It was impossible to say what the conditions of the colonies would have been if they had never borrowed, bub it may be truthfully asserted, so far as New Zealand is concerned, that on the whole borrowed money lias been judiciously spent, and has brought the resources of the colony to a developing point which would never have been reached without that expenditure. An odd bit of railway here and there might have waited for a time, or a post-office might have been built with accommodation in advance of the requirements of the district at the time, but taking a broad view of the whole expenditure, it has been made with a forethought and prudence which any impartial observer must acknowledge. Out of a total debtof £37,677,619 no less than £15,586,479 had been spent on railways, tho cost of which per mile had been vory moderate. The £10,000,000 spent upon native ware and defence was considerable, bub a plausible argument might have been advanced that such expenditure should have been borne by tho mother country. The rest of the money had been spent on necessary works, and surprisingly well spent. The " gravamen " of the attack was not so j much in the allegation that money has bean borrowed recklessly and spent injudiciously in the past, as in the assertion that the same borrowing is still going on, or, what was worse, had given place to a system of robbing, and that without either begging, borrowing, or stealing from the people of the United Kingdom poor New Zealand would not be able to cany on a day. These j were truly marvellous conclusions. Some men had an extraordinary habit of pointing to everything in proof of their rooted conviction that the British Empire is crumbling to pieces, and the race of men on the Stock Exchange—-known as " bears"—will find arguments with which to depreciate stock in the best balance-sheet ever produced. Allowances were made for such, but for a man of intelligence, having access to the official figures of the colony, to draw such conclusions as those arrived at by the writer of the August article, evinced a capacity for misrepresenting facts and figures which was stupendous. "It was alleged," proceeds Mr. Perceval, " that the debt of New Zealand, as a State, is more than it can carry, and that it could not pay its way a week without borrowing." To reply to that charge it was necessary to consider the sources from which the colony derived its receipts, and the equilibrium between receipts and expenditure. The Customs revenuo depended upon imports, the imports upon the purchasing power of the producers, indicated by the value of export*, and the exports depended upon the productiveness of the soil, the markets, and the industry of the people. The land and income tax depended upon the value of property, and the railway receipts, good management conceded, depended upon the carrying trade of the colony. If that chain of argument were correct, the key of the wholo position seemed to bo the exports of the colony. The money received from exports paid for imports, the imports provided Customs revenue, the stability of the export trade gave the value to the land, and the land value was the source of the land and income tax. After citing a table showing the value of ths total exports, and also the export of the staple products during the last ben years, which exhibited a steady, if nob a rapid, industrial growth, which the colony felt proud of, Mr. Perceval proceeded to argue that this increase in production was not owing to advanced prices ; on the contrary, the markets have been mostly unfavourable, but to an increase in production and to the expansion of land settlement in small holdings. The immediate effect of the tapering off of tho expenditure of borrowed money in New Zealand was to turn the attention of the people of the colony to the development of the natural industries of the country, which are agricultural and pastoral, and the process of land settlement, thus stimulated, was still going on at a rapid rate. For the year ending 31st March, 1892, the progress of the land settlement had been most satisfactory. Ib was interesting to contrast the view taken in the Investors' Review and that taken by the people of the colony on tho point of a reduced value of imports during tho years of trial. On this side the world ib was pointed to as an evidence of colonial decay, while on the other it was regarded with the utmost satisfaction as an evidence of vigour and thrift. Personally he could only recall with feelings of pride the efforts made by colonists in New Zealand, both on the part of the Government and individually, to reduce public and private expenditure until they had learned to live within their means. They lopped off luxuries right and left, and set to work to increase their productions until they saw at last what they looked for, viz., their income exceeding their expenditure. The effort was little short of heroic on the part of the Government, and the then Premier of the colony, Sir H. A. Atkinson, by his grim determination to force on the colony the necessary economies, had so shattered his health that he never recovered from the strain, although he lived long enough to see the good result of his work. As soon as the corner was turned, their imports began to recover again, until last year the Customs duties reached the highest point in the history of the colony. While their exports were increasing, there was no fear but that their imports would increase in corresponding ratio. ~ Mr. Perceval next proceeded to examine the land value and tho taxation based upon those values, avowing himself very sceptical on the subject of the land values of the colony. He thought it probable that by November, 1894, the North Island would have reached a total land value nearly equal to the South. In considering the results of the land assessment, ib should be remembered, he said, that it had been made at a time when in no part of the colony did any excitement in land-dealing exist, and there was nothing like a boom, if one or two small districts were excepted. In many parts of the colony there had been a great deal of improving done, and on the whole there had been, in the districts which

showed the greatest increase, a steady and bona fide demand for good to fair land. Very few portions of the Auckland provincial district ehowed an increased value, bub in several counbies in the southern part of the North Island there had been a most marked increase in the total assessed value. Ib has been asserted—ib was always so— that values had been placed ab too high a figure by assessors; bub that was not bhe case, and the " higher total must be ascribed—firstly, to the increased extent of improved land, and bo a generally firmer; feeling in the land market; and secondly, to many largor properties having been raised to their fair markeb value." Although the value of the land appeared high, if tho best test of value, namely, the value of the annual product from ib were bakon, ib would be found bhab bhe land provided a fair inberesb on the value placed upon ib. The exports were roughly ten millions. That was the balance left after local consumption, which might certainly bo placed ab a value of ben millions more. That, he thought, was nob a bad return from property estimated to be worth 122 millions. The insinuation that tho railways were making "a good show for the present, at the cost of the future" would not bear examination for a moment. The suggestion was based on the assertion that the proportion of working expenses to gross receipts had declined, whoreas, usually, railroads as they grow older required more for maintenance, salaries, aud wages, and more for renewals.

An examination of the report of the Railway Commissioners would disclose the good management of the railways, and that the tracks and rolling stock were kept in a proper state of repair. Referring to the most barefaced of all the charges, viz., that tha Government had, after soliciting the public to subscribe for municipal and harbour loans, left them to be defaulted upon, Mr. Perceval wrote with some indignation. Had the man who aspersed the good name of the colony doneas. much for an individual ho would have had to pay heavy damages for his libel. As a matter of fact there was no more reason for saying that New Zealand was responsible for the indebtedness of her corporations than there was for saying that England was responsible for the indebtedness of the Manchester Canal Company. It might be conceded that defaults by colonial local bodies were much to be regretted, bub ib was idle to say tho colony as a whole was liable. In the case of the New Plymouth Harbour if the bondholders thoughb there had been any tampering with the security by the Government, a courb of law could be set in motion for the recovery of the land alleged to have been taken from them. No proof was offered of the wild statement that Now Zealand was " slyly adding to its floating debt." It was true that the debt was larger in 1889 than in 1887, and yet New Zealand had nob borrowed since 1888. The conversion of old loans into inscribed stock may have increased the nominal amount of the debt, but the operation had resulted in a largo saving of tho annual interest. So far from having borrowod on the sly, the colony had not oven borrowed all the money she had been authorised to borrow, as she had in hand £800,000 of Imperial guaranteed 4 per cents., part of the loan of 1870. With regard to the remarks in the article on the new taxation, Mr. Perceval stated that now the exact figures were known, astonishment was everywhere expressed at the harmless character of the new tax, and the unnecessary excitement, worry, and fuss which had been made about ib. With regard to tho charge that many companies had gone wrong or lost money in New Zealand, Mr. Perceval asks in return a number of vory pertinent questions, but he does not care to vory closely follow a line of argument which seems entirely without point or value. Of one thing he felt euro, and that was, if the capital invested in New Zealand for the last 50 years were lumped together, and compared with that invested in other parts of the world, it would be found that the money invested in New Zealand had produced a better return to the investor than the capital invested in most other places. If black lists of companies which had come to grief in countries other than New Zealand during recent years were examined, it would be proved that the list for New Zealand was by comparison surprisingly small. While banks and building societies in other parts of the Empire had been tumbling down like card houses, there was no instance of the failure of a bank or building society in New Zealand.

Unable to deal exhaustively with the whole omnium gatherum of charges advanced in the Investors' Review, Mr. Porcoval concluded his paper with a brief answer to the forebodings expressed with regard to tho stabilitity of the industries of the colony, directing pointed attention to the enormous advantage New Zealand derived from the accident of reverse seasons, giving her a markeb for her meab and dairy produce. Australia shared thoso advantages, bub the conditions of production were much less favourable in Australia than in New Zealand. As regards facilities, for agricultural or pastoral production, New Zealand was far superior to any of the Australian colo nies. In reply to Mr. Wilson's final jeer that New Zealand had at present no attractions for emigrants, Mr. Perceval remarked : Notwithstanding the debt of the colony, the returns from land are so good and so certain, and the taxation upon it so small, that no country offers better attractions to hard-working men with a practical knowledge of farming than does New Zealand. A fertile soil is there, inviting capital and labour from hero to migrate and provide under most favourable conditions for the necessitous wants of this country, and to aid in tho development of one of the richest and most beautiful parts of the world."