NOTES AND COMMENTS.

New Zealand Herald, Volume LVII, Issue 17362, 8 January 1920, Page 6

NOTES AND COMMENTS.

• AUSTRALIAN PRODUCE. The latest volume of the Official Year Book of Australia contains a statement of the effect of prices on the value of Commonwealth exports. Taking 1000 to represent the price level for 1901, that for 1907 was 1308, and that for 1913 was 1290, while during the war period it was 1299 for 1914-15, 1591 for 1915-16, 1965 for 1916-17, and 2084 for 1917-18. In other words, the averago prices of Australian exports— of specie and gold bullion— 191718 were about 61 per cent, greater than in 1913, and more than twice as groat as in 1901. The value 3 of exports of merchandise from year to year as actually recorded compare with what they would have if computed on the " mass prices" for 1901 as follows:— Values as Values on 1901 Recorded. Prices. 1901 . . .. £35,348,396 £35,348,396 1902 .. .. 29,348,447 26,948,068 1903 .. .. 29,841,410 26,881,535 1904 . . .. 40,671,224 35.620,038 1905 .. .. 45,863,924 38,219,936 1906 .. . . 52,842,704 42,005,830 1907 .. .. 62,252,994 47.594,024 1908 .. .. 50,703,527 42,607,165 1909 .. .. 66,928.460 47.718,742. 1910 .. .. 70,313.053 67,361,593 1911 .. ~ 67,920,619 58,601,825 1912 . . .. 67,214,874 53,918,427 1913 .. .. 75,407.664 58.455,553 1914-15 . . 58,118,379 44,740,861 1915-16 . . 64.387,302 40,469,705 1916-17 .. 86,433,667 43,085,398 1917-18 . , 74,912,489 35.946,491 The difference produced by the rise in prices has become very marked during the last few years. But to those engaged in production there is a set-off in the high cost of everything used, with another set-off in the form of increased taxation. Taking the position as a whole,' however, tho advance in prices lias had the effect of lightening the real burden of intercut on British capital invested in Australia. But here, again, there is a counteracting factor, as the Governments have been incurring fresh debt pretty freely of late years, apart from war borrowings.

AUSTRALIAN FINANCE. The public accounts of the Commonwealth and the six Australian States for the financial year ended June 30, 1919, show an aggregate expenditure of about £96,500,000 charged against revenue. The revenue is composed principally of taxation to the extent of £44,750,000, gross earnings of Government railways and tramwLys amounting to about £27,500,000, and post office revenue about £6,000,000. Expenditure includes nearly £29,750,000 for interest on public debts, of which a little over £15,000,000 represents interest on war debt; while other items of expenditure include over £21,000,000 for working expenses of Government railways and tramways, £3,000,000 for the regular cost of defence (apart from war expenditure), £4,750,000 for war pensions, nearly £4,000,000 for invalid old age pensions, about £5,250,000 for education, £5,500,000 for post office expenses, together with administrative expenditure of various descriptions. The revenue and expenditure of the Commonwealth and the six States show in the aggregate a net deficiency of £1,153,900 on the year. In addition to expenditure charged against revenue, expenditure again.4 loans has amounted to about £76,500,000, of which war purposes have absorbed £62,250,000 and public works over £14,250,000. The public debts of the Commonwealth and the States amounted to about £694,000,000, a total which has since been increased. While the growth of the debts since 191.4 lias been mainly due to the war, it is also to be noted that loan expenditure on railways and other public works during the Jive* yean has amounted to £88,500,000.

THE PRINCES OF INDIA. The recent proclamation by the King constituting a Chamber of J.'rinces in India confirmed tin dersion cf the Imperial Government announced by the Viceroy at a conference in November of Ruling Princes and Chiefs. Lord Chelmsford eaid the difficulties and dangers of peace were less patent thin those of war, and accordingly were more difficult to cope with. 1 tie new aftpr-the-war spirit was the greatest danger he declared, that had ever faced mankind, and the Princes and Chiefs could lend valuable assistance by guarding their States against a lawless and malicious spirit and by refusing to tolerate lying stories as to the motives of the British Government. The Viceroy announced the Government's intention to create a permanent Chamber of Princes. It was of the highest importance that the qucstio of admission to the Chamber should be dealt with on broad and generous lines, the deciding factor being the status of the particular .State, not the personal qualifications of the ruler for the time being. He entirely agreed a* to the importance of maintaining the status quo in feudatory relations. Rulers qualified for admission to the Chamber would be called Ruling Princes, and the ruiers of lesser States Ruling One's. Attendance and voting would be voluntary, the Chamber being a consulting and not an executive body, 'J he interests of absent rulers would be sufficiently safeguarded. Direct transactions in business between the Government of India and tho States would not bo prejudiced by the institution of the Chamber, each State maintaining the right to direct communication with the Government. The Chamber should not discuss the internal affairs of any State or of an individual ruler.

PREMIUM BONDS. In an article discussing the proposal that Britain should issue premium bonds, the Spectator says ;-Th* gambling and speculative instincts of the people, having been deprived during the war of their opportunities, are now breaking out of bounds. It should be the business of the State to turn undoubted facts to its own advantage. If the House of Commons were to confirm our belief that millions of I money are disappearing fruitlessly every : day in betting, and that other millions arc | being sent abroad to he staked in gambles which will never bring any return to this I country, and were further to say tnat it i would be much better that the' GovernJ ment should harness this speculative ! mania in order that the money should 1 come to the State instead of "to bookI makers, and to this country rather than I another, we should mid it very difficult | indeed to dispute that conclusion. Under ( a system of premium bonds there would be some hope of saving the gambler from more .rambling. By laying out his money fur the pod of the Slate, with the chan e of picking a winning number and a great prize, he would not merely keep his capital, but would earn a certain dividend, though a small one, upon that capital. He might be gradually won from gambling to the habits of a prudent investor, just as the opium-eater is cured by gradual reductions of Ins allowance of the drug. The Select Committee which reporter! in January. 1918. although on the whole it was against premium bonds, implied that it might be necessary to have recourse to them if other methods were not sufficiently' attractive to the public, and it pointed out that there were premium bonds in | existence, in France to the amount of 400 j million pounds. In Fiance, we believe, ' they are not regarded as inimical to thrift, I but are invested in freely by the small I and careful investor who is such a familiar ! French type. Of course differences of j racial temperament might upset any calculation on this basis, and we certainly, do not suggest that premium bonds should become a regular British moani. of investment. We rather regard them as possibly the only way ovt of an abnormal situation.