THE BIMETALLIST MEETING.

Otago Daily Times, Issue 10306, 13 March 1895, Page 7

THE BIMETALLIST MEETING.

TO THE EDITOB.

Sib, —la his address last night Mr Frewen said: "Please bear in mind that if this community cou'.d secure ths same price for wool which you obtained before the abandonment of bimetallism—that is, over eight millions instead of four millions —then if you were to impose a 50 per cent, 'single tax' on the export of this single item—woo!—your entire community could go free of all other taxation of every kind—your railways could be operated absolutaly free both for freights and passengera, and your wooJgrowers would not be a penny worEo off than they are now. On the contrary, they would be much better off, notwithstanding this great export tax, because they aiso would share with the rest of you the advantage of no customs taxation, no income tax, of railways free, posts free, and land free." Later on in his address he made a calculation as to the monetary gain which would accrue to the people of New Zealand were prices as high as they were in 1873. He said that the wealth produced annually m New Zealand might be taken at £15,400,000, and that after deducting a subsistence charge, a charge for administration, and the interest payable on the loans, there was at the present time left to be divided among the New Zealand people the annual sum of £1,800,000 ; whereas if prices were as high as they were in 1873, there would hiwe to be divided annually the sum of 10 millions —" a surplus of a clear 10 millions for savings and for enjoyment."

This is all nonsense—absolute, unmitigated nonsense. This fact appears to me so clear that I can only be amazed at a man who has, as he says, devoted much attention to the subject, not seeing it. I will prove to your readers, by arguments which cannot be overthrown, that if prices were now as high as they were in 1873, New Zealand would gain only £1,200,000 annually.

As I pointed oat at the meeting, ii we leave out of account for the moment the borrowers and lenders-of money, it makes no difference to a community (with the exception of dulnesa of trade caused by the bad financial position of borrowers) whether prices are high or whether they are low. A man sells stock at a certain price and buys other things with the money. If prices were twice as high he wonld get twice as much for his stock, but wonld have to pay twice as much for what he afterwards buys. New Zealand exports £4,000,000 worth of wool annually, and with the money received for this other things are bought. If prines were as high as they were in 1873, New Zealand would get £8,000,000 for her wool, but Bhe would pay twice as much for everything she bought with this money ; consequently she would be do better off. It has thus been proved that, apart from the question of New Zealand's public and private loans, the great fall in prices has done the New Zealand people no harm. I will now consider the effect which the fall in prices has in reference tothesß loans. Mr Frewen says that the interest paid annually on the public and private loans of New Zealand is £3,300,000. Even without going further, your readers may see that when he admits that the harm arising to New Zealand through the fell in prices has reference to the loans alone (as he admitted in reply to what I said), and when he states that the annual interest paid on public and private loans is £3,300,000, ib is absurd for him to say that, if prices were now twice as high as they are, there1 would be a surplus to be divided amoDg tha New Zealand people of £10,000,000, insteadofasurplusof £1,800,000. However, I will go into details so that there can be no room for doubt on the point. If prices were an high now as they were in 1873, New Zealand would still have to pay interest on public and private loans to the amount of £3,300,000 (I assume that Mr Frewen's statement as to the amount of this is correct), but this sum would be just half as valuable as it is now. In other words, New Zealand would have to send to London, for the purpose of paying interest on her loans, only ona bale of wool for every two she send* now. Consequently, if prices were as high as they were in 1873, New Zealand wonld gain about £1,650,000 at the present value of money (as distinguished from the value of money in 1873). But there is another matter to be looked at. New Zealand produces gold to the amount of about £900,000 per annum. ;Were prices twice as high as they are now, this gold would be worth in purchasing power only half as much as it now is. Consequently, on this head New Zealand would loas about £4-50,000 annually. So the net gain to New Zealand, were prices as high now as they were in 1873, would be the annual (sum of £1,200,000 at the present value of money.

This is the truth. I defy Mr J?rewen, or anyone else, to contradict me.

He falls into several grievous errors in his second calculation in reterence to the finances of New Zealand —the calculation which assumes all price 3to be doubled, and the annual value of the products of New Zealand to be £31,000,000. Id the first placs, though he doubles the subsistence ration, he does not double the coat of administration. Ib it to be expected that all the New Zealaud members of Parliament and all the Government officials would be content with their present salaries when the cost of living would be exactly doubled? Secondly, he leaves out of account the depreciation of gold which would take place, and the fact that New Zealand is a gold-produciDg country. Thirdly, he deals with the balance, which is got by assuming prices to have doubled, as if ifc could buy things at present prices. What, then, becomes of the chimerical idea that, if we only had prices ai high as in 1873, the railways could be in every respect free, the cost of the administration of the country could be paid, and no taxation of any kind would be necessary ?

I will put my argument in another form. Let us suppose that the British Government says to New Zealand, "We will arrange with all your creditors. You need send no more interest to London." And let us suppose that prices are twice as high as now. What would be the annual gain to New Zealand ? Now, Mr Frewen has admitted that if it were not for the loans and tha interest to be psid on them, it would make no difference to New Zealand whether prices were high or low. Ths annual gain to New Zealand therefore in the circumstances supposed would be simply the amount of the interest—namely, £3,300,000. But still Mr Frewen says that if only prices were doubled —the interest still continuing to ba paid—there would be a surplus of £10,000,000 tn be divided instead of one of £1,800,000. The boys at the schools could understand that all of these statements cannot be correct.

I was allowed to state at the meeting the first part of my argument — down to tha proof that it did not matter to the people of New Zealand whether prices were hifih or low if the question of the loans was left out of account. I was proceeding to refer to what Me Frewen had said about the £3,300,000 of inteMßt when he interrupted me, »nd said that "he was confident it would be impossible to persuade any portion of tho audience that iis did not matter to the colony whether to pay interest on borrowed money it had to send one million or two million bales of wool." Such a statement implied that I was stating the opposite of this, whereas he had heard me a. minute before founding some of my arguments on this fact, and he had listened to these arguments andh&d nodded assent to them.

I am interested in the abiding union and future greatness of the British Empire. I have at heart the continuance of fraternal regard between nil the peoples, wherever on the (surface of the globe they may live, that look to ths British leles as their own old fatherland. I trijst that long after all of us here have left thia worßli after our little struggles and toils are finally past, the peoples to which I have referred, as also that people which, aa the result of mistakes made long ago, is . now under a different flag, shall live in close friendly intercourse in lime of peace, and in time of war shall always etand side by side. Consequently I regret to see circulated in these colonies statements which are greatly calculated to interfere with friendly feeling between the peoples in the various parts of this Empire. If Mr Freven had merely talked nonsense I wonld not have taken tbe trouble to point it out— either at the meeting or here. But when he talks such deleterious nonsense it is not the duty ot anyone who hears it and knows that it is nonsense to let it pass unnoticed.

There are very mauy other points 1 would like to refer to, buo I am afraid you will nofc care to allow me much more of your space. But I want to refer to a very few of these, and will do no as briefly as possible. Mr Frewon used the phrase " creditor nation" in reference to Britain. This is not correct. Of the 40,000,000 inhabitants of Scotland, England, and Ireland very very few of them are moneylenders. Almost all of these 40,000,000 would greatly benefit by a change in the monetary standard. The cause of the delay ia the makinsf of this change is simply the conservatism of the British people—their great disinclination to take " a leap in the dark."

Any person who knows anything about the relations between Eritain and the colonies and about th» transactions which continually take place between them will know that Britain mould rather do injustice to herself than to any oue of them. Therefore many of the remarks of Mr I'rewen are quite uncalled for. Ido nbfc think the people of Duaedin will appreciate his references to Mr Gladstone.—l am, &c.^

Dunedin, March 12,

John Johnston