THE The New Zealand Herald. AND DAILY SOUTHERN CROSS. MONDAY, JUNE 9, 1903. AUSTRALASIAN INDEBTEDNESS.

New Zealand Herald, Volume XXXIX, Issue 11987, 9 June 1902, Page 4

THE The New Zealand Herald. AND DAILY SOUTHERN CROSS. MONDAY, JUNE 9, 1903. AUSTRALASIAN INDEBTEDNESS.

We commend to the consideration of our readers the exceedingly instructive article upon Australasian indebtedness— from the pen of a writer in the North American Review— will be found upon another page of this issue. It may beneficially be compared with that famous colonial paper addressed by Sir Francis Dillon Bell to the Colonial Institute at the first meeting of that body after its formal incorporation by royal charter, nearly twenty years ago. To that paper the North American Reviewer very properly and reasonably refers, by showing the grave differences between the prophetic estimates of Sir Francis as to our financial position at the close of the nineteenth century and what actually existed when the time expired. The criticisms made are oi that general and inclusive character which the observations of careful and intelligent foreign observers necessarily assume. But even in this broad perspective attention is drawn to New Zealand as having increased her indebtedness " even more rapidly than the colonies now federated in the Commonwealth of Australia." More than this might be said. This colony not only continues to heavily increase its indebtedness when our neighbours have become generally cautious, taught wisdom by the financial cyclone of 1893. but- it has aggravated and increased the tendency to spend its borrowings in the construction of " a few branch railways in outlying and sparsely settled districts which do not [and will not] pay even their working expenses." As the North American Reviewer points out, it is not so much the extensive borrowing as the unprofitable use of borrowed money which are. involving the colonies in a most serious financial entanglement.

Twenty years ago, Sir Francis Dillon Bell took the very tenable ground that it was to the interest of British financiers to furnish practically unlimited supplies for the development of British colonial territories. " One of us Australasians," he said, " is worth more to the English manufacturer than a dozen Americans, eighteen Frenchmen, or twenty Germans. Is this trade worth keeping by you 1 Then it is worth extending. Instead of letting us stay where we are help us with your capital to accelerate the speed which has already marked our advance." And he pointed out the vast acreages of unused and fertile lands held by the colonies as "the splendid patrimony of England, which she confides to us to deal with as trustees for the benefit of the

Empire.' These lands, opened up by railways, furnished with harbours, riddled with roads and telegraph's, would maintain at an increased, not diminished, rate the influx of immigration for many years. Britain needed food and these lands would supply her. Britain needed markets and these lands would give them. All most true. And that the British capitalists had confidence in our future and in our capacities and in our Governments is shown by the hard fact that since the reading of that memorable paper they have loaned to our Australasian Governments very nearly one hundred and fifty million pounds sterling. But what'has been done with this enormous amount 1 It is all very well to say that a London syndicate could be formed in twenty-four hours to take over our Australasian railways and our Australasian indebtedness together, one being a set off for the other. Do we not all know that the' syndicate would be buying the railway monopoly rather than the railway plant 1 We have borrowed money by the million and we have wasted it by the million, so that today the burden of interest falls upon the general revenues and not upon the earning power of what were intended to be profitable enterprises. But we have done worse than this. We have squandered so much in profitless directions that we have starved profitable directions. In doing so we have locked up the lands which railways were to make available and thus have checked immigration and reduced our power to bear indebtedness with ease. Outside critics can only see the leading features of our financial position. We can see, feel and understand how it has all come about.

Confining ourselves to New Zealand it cannot be said that Sir Dillon Bell's forecast was in any way an extravagant one. The unforeseen increase in Australasian indebtedness has not been brought about by this colony, which has accumulated its liabilities by the steadiness of its stride rather than by the wild plunging that distinguished the Australias of the '80's. If Sir Dillon Bell had been told in 1882 that our liabilities in 1902 would be over fifty millions sterling he would doubtless have retorted that since our population would be at least a million and a-half and our revenue ten millions there was nothing alarming in the prospect. And he would have spoken of the advantages of a railway-system that threaded every province from the North Cape to the Bluff, and that had made possible the settlement of ten million people upon the soil. That is the whole difficulty. We have not got our threading railway and we have not got our lands unlocked nor our million and a-half of European population. We have political holes bored in barren Midland hills and political lines lying in desolate Otago valleys and the South gridironed with rails wherever there is too much traffic for a large cart. But immigration has almost ceased because the most fertile parts of the colony lie locked up, in spite of the phenomenal prospects of the dairying and other industries. We have had enough money to provide a reasonable railway service for the whole colony, thus opening up the greater part of its best lands and making the railway debt wholly selfsustaining. That our financial position is what it is. is not due to the men who planned and worked to make New Zealand prosperous, who advocated borrowing for high and patriotic motives, but to those who misapplied and still misapply our national loan-money, who have brought the Government railway policy into such disrepute that the original purpose and desirability of national borrowing for national development has been almost forgotten.