New Zealand Mail. PUBLISHED WEEKLY. SATURDAY, JULY 12, 1873.

New Zealand Mail, Issue 117, 12 July 1873, Page 11

New Zealand Mail. PUBLISHED WEEKLY. SATURDAY, JULY 12, 1873.

Whether the General Government may have occasion to ask the authority of Parliament for further borrowing powers for colonial purposes or not, it is perfectly certain that the House of Representatives will be invited to consent to considerable loans for some of the provinces. Ever since the passing of the Public Debts Act, the borrowing powers of the provinces have been so far restricted that they can only now borrow upon the authority of Parliament. No one can doubt the wisdom of the measure which prevented the provinces from entering into competition with the Colonial Government in the money market. The great evil of the old system was that whilst a moral obligation on the part of the colony as a whole attached to the provincial loans, the latter were often rushed into the market at any price they would fetch, and very often they were disposed of at such a low rate as to seriously impair the value of the colonial securities. But we venture to think that the restrictive Act making it compulsory that any fresh obligations should be incurred only with the consent of the Legislature, did not contemplate the entire abolition of borrowing for provincial purposes. The House has already adopted a liberal interpretation of the Act by authorising in several instances loans raised upon special security for various provinces, and we have no doubt that the same view will be taken of any additional proposals that may be made. Otago, Wellington, and Nelson, have already secured certain borrowing powers upon special security, and there is no reason why, if thesecurity offered is sufficient, any arbitrary limit should be fixed. There is a large amount of misapprehension in the minds of some people upon the question of borrowing money for reproductive works. A remarkable illustration of the operation of this dread of what is called " debt" is afforded by the Province of Nelson. For years it was a stereotyped portion of the speeches of the Superintendents of that province that its liabilities were small, that its debt was almost nil, and that in this respect it exhibited a desirable example to the rest of the colony. Beyond this, it was considered to be a matter of congratulation that the Provincial Treasury : had always something to its credit at the Bank. But what were the accompanying circumstances of this state of things? Simple stagnation, and the utter prostration of everything calculated to push the province ahead and utilise its undeveloped resources. But for its goldfields—which have been retarded seriously by the timorous policy of the Provincial Government—Nelson-proper would be now pretty much what it was ten years ago. As it is, the Nelson province occupies the last position in the rear rank. Otago and Canterbury, in the days when the Provincial Governments could borrow ad libitum, have, in spite of the comparatively unfavorable terms under which they borrowed their money rushed far ahead of any of their neighbors. Their public estate has been enormously enhanced in value by the expenditure upon public works, and it has become a logical result that where public works are constructed the sale of formerly useless lands has been effected, and the settlement of population has followed to a degree that in former years would have been deemed an impossibility. In the face of the results which are already to be seen in various parts of the colony of the judicious "expenditure of borrowed money in the improvement of the public estate, both on the part of the provinces and of the General Government, all sentimentality upon the subject of further borrowing ought to disappear. All that the Legislature has to demand is that any further proposals to incur additional debt should be based upon some sound system for the application of the money. If the purposes to which loans are to be ap. plied are such as to bring them properly within the category of reproductive works, there is practically no limit to the employment of loaned capital in a new country like New Zealand. The public creditor—the capitalist j

—is quite as ready to lend his money if he can see that it is to be expended in such a manner as will practically increase the value of the security offered him. Next session there will, no doubt, be several applications on behalf of various parts of the colony fur authority to raise further loans for certain special purposes, and if the applicants can show a sufficient security to the colony, there is no reason why the applications should not be granted if the works to which the money is to be devoted are of a desirable character. Wellington will ask tor power to raise £210,000 to be applied to purposes which will enormously add to the value of its public estate, and as largely contribute to the spread of settlement. The proposal was submitted to the Provincial Council last session, and adopted by that body, although a small section, utterly unable to take a broad and comprehensive view of the question opposed it. The objectors forgot thatwithout the means for making roads in the unoccupied districts, bridging rivers, and otherwise making the waste lands available, the province must remain at a standstill, and be content to see its neighbors outstripping it in everything that goes to make a prosperous and progressive community. It is all very well to say that we have so many thousand acres of waste land, but unless some evidence is afforded that the occupancy of these lands can be made profitable, we might just as well have so many chateaux de JEspagne—very pleasant to dream about, but impossible to realise. .We have little doubt as to the views that will be taken by the House upon this subject. The province asks for a loan tor colonising purposes to be charged against its own revenues only, and for which ample security in land is offered in addition. The -schedule of works proposed is ,one that includes valuable public works in every part of the province, which, if carried out, will result in the rapid settlement of the country and the utilisation of lands which might otherwise remain unprofitably idle for many years to come. The argument that applies to this province will apply to any other which desires to develop its resources. The colony has entered upon a new career. Jt cannot stand still : and no sentimental or theoretical objections to further provincial loans should stand in the way, so long as precaution is taken that the money shall be properly applied.