The Oamaru Mail TUESDAY, JULY 6, 1880.

Oamaru Mail, Volume IV, Issue 1319, 6 July 1880, Page 2

The Oamaru Mail TUESDAY, JULY 6, 1880.

The proposals made by Mr. Oiuiond, in his speech on the no-confidence motion, that the Colony should sell the railways and a large share of the Colonial estate, ancl by this means raise money to pay oil* a portion of tlio public debt, has, we find, found many supporters amongst the journalists of the Colony, The novelty of the proposal has apparently dazzled tlieui, and, without pausing to consider the matter carefully, they have jumped eagerly to the conclusion that this is the scheme, and the only scheme, calculated to bring the] Colony safely out of its financialj difficulties. Now, let us see what this proposal amounts to when submitted to careful analysis, It simply amounts to sacrificing a valuable public estate and an equally valuable property in order to obtain a very small amount of relief from taxation. It is well- 1 known that a very large amount of the Crown lauds—that is the pastoral lands —is composed of rough country, rugged ranges and snow-covered mountains, of little or no value. It is doubtful if much of the land could bo .sold above two or three shillings an acre, while a large amount of the back country could not be sold at any price. But for the sake of argument we will consider it possible that ten million acres of land in the Colony could, including, of course, some amount of agricultural land, be told at an average of ten shillings—and we do not believe that even that average could be obtained, especially in the present state of financial depression. Supposing that this result could be achieved, we should obtain a sum of L 5,000,000, but from this would have to be deducted the cost of surveys and -Other expenses, which would certainly not be less than a quarter of a million. Thus tfcje gacrifice of an estate that might in a few years become of considerably greater value ; as the opening up of the Colony progresses, would bring us in only about L-1,750,000, without taking into account, too, the amount that woidd have to be expended in the formation of roads. Then again with regard to the railways, what; would be the result] We find that they have cost the Colony something like LI 2,000,000 for construction, but we have carried on the work very expensively, and tiicrp can be no gainsaying the fact that we have not obtained good, value for our money. Our railways are not, in fact, worth anything like the sum they have cost us," and in estimating the probable amount that we should realise by the sale of the lines we must take into account, not the sum we have expended upon them, but their actual commercial value, and that value would be determined by any prospective purchasers according to the Ajnount of interest that would be obtainable on the capital invested. "We find that, if aUowanse is made for wear and tear, renewals and repairs, that our lines return but little over one per cent,, but we will suppose that under more economic management they might be made to yield more than double that amount —that, after making due provision for wear and tear, etc., they are capable of giving a profit of two and a half per cent. Would such a return prove sufficient to tempi capitalists to give us for our railways anything like the sum they have "cost "the Colony? We trow not. Any company or association purchasing the lines would do so, not with any philanthropic intention of relieving an unfortunate Colony, but for the purpose of making money. They would therefore only be prepared to invest their capital to such an extent as would ensure a reasonable amount of profit. Some inducement woidd have to be offered them to speculate, and in order to obtain even £10,000,000 for a property which has cost us LI 2,000,000, Ave should be compelled either to give a guarantee of interest to a certain amount or to give the pm-chasers the right of levying such charges as would render the lines a paying speculation. In .either of these "cases it must at once be manifest that the taxpayers of the Colony would receive no relief: in one .case th.ey would be taxed to make up the deficiency in the guaranteed rate of interest, and in the other case increased rates on the lines would mean an increase in the prices charged afterwards for articles ■ carried by rail in the one direction, and a loss of some share of the price ; obtained for the produce earned in the other direction. Either of these alternatives, then, would ba l>ighly objec- ■ tionable, and the adoption of cither of these means of giving a commercial : value to oup railways would certainly J not tend to lighten the burdens of the s people. TVe are therefore forced to £ fall back upon the return of 2},- per 1 cent, that the railways might give as c the basis of our calculation. "We need - scarcely say that .any company offering for the railways would expect at least 1 to obtain five per cent interest on the * capital invested, after making due t allowance for deterioration in value of i the property. Taking this for granted, < then, we find that in order to secure c this return they C.ou)4 not give r for the railways more than half the i amount they have cost us to construct. 3 In other words, then, we could not ex. J pect to obtain more than L 6,000,000 n bj the sale of our railways. Thus we find that by the sale of nearly the whole c of our lands and all our railway lines t we should obfcgin less than eleven I millions of money with whieh to reduce t our indebtedness of thirty mj]lions. e

What would be the result of these transactions supposing that this sum could be invested in such a manner as to return five per cent.—for it must be borne in mind in making up our calculations that we could not immediately reduce our indebtedness, for our debentures are at a premium, and could not be purchased without some loss, while the price of the debentures would most certainly rise directly we entered the market as purchasers 1 We should be able, provided the money could be invested, to reduce our annual charge for interest by about L 500,000 ; but as a set off against this we should have lost the sum annually returned to the Treasury by our railways, estimated at L 300,000, and the rents derived from the lease of Crown lands, amounting to L 130.000. Thus it will be seen that the utmost relief that would be.'obtained would be LI 00,000. Eut this is not all. We should have lost for ever lands that may ere long return us a much larger rental—lands that, whfen the present leases fall in, may fairly be estimated to vetijrn L 200,000 to the Treasury. We should also have parted witli our railways, which, under better management and favored by a more prosperous state of the Colony may yield far greater returns than we at present anticipate. We should have put a bar to colonisation, for we should have parted with lands wholesale that might in part, at anyrate, have been available | for sale in small blocks. We should have transformed our pastoral land, and much of our agricultural land too, into immense sheep- carrying but few tax-paying colonists, to the exclusion of large numbers of prospective future settlers, everyone of whom would have assisted us to bear our burdens ; for it must be borne in mind that the scheme is one for the wholesale sacrifice of our estate. We must, if the scheme is adopted, sell it without regard to future settlement. We can make no stipulation as to areas or settlement. It- must be a sacrifice pure and simple, and we uiust accept the terms dictated by the capitalists whose " money we want. Would such a scheme ■ as this tend to the future welfare of the Colony? Would such a'sacrifice as this compensate us for the small measure of relief from, taxation —amounting to less than five .shillings per head on the population^—that wpuld be qbtainpd'] The answer must surely and decidedly be in the negative. Then, again, with regard to our railways. We should have parted with them to a company, or to companies, whose only aim would be to make money. We .should both in regard to our lands and our railways be piaoecl entirely at the mercy of speculators. Better far, we say, " bear those ills we have than fly to others that we know not of," especially , when the amount to be gained is of so yery trilling a nature. This sacrificing policy, iliGUgJj first dazzling and tempting by the sheer force pf its originality, will not bear the test of careful analysis, and it is surprising that men whose duty and privilege it is to create and guide public opinion do not see clearly through the thin veil that covers it 3 naked deformity. The only true polky ppen to the Colony is retrenchment and the imposition pf the neoessary additional taxation in such a way that everyone shall contribute according to his means—-so that every burden may be proportioned to the back that lias to bear it.