GREAT DEBTS OF NEW ZEALAND.

Colonist, Volume VII, Issue 683, 17 May 1864, Page 3

GREAT DEBTS OF NEW ZEALAND.

(From the Lyttelton Times.) The financial history of New Zealand has been remarkable hitherto for nothing so much as its steady and progressive prosperity. This result has been due, no doubt, in a great measure to the way in which the colony has been settled. At different times and in different places, bodies of colonists have been selected from separate sources to form the various provinces ; and the earlier settlements as they have taken root have frequently found remunerative employment in supplying the wants of those founded at a later period. In this manner the colony has gradually grown up, and each petti-set-tlement has helped to consolidate the whole, till New Zealand has at last taken rank as the most thriving among the younger colonial possessions of the British Empire. In all the chief settlements the increase of population and trade has been very remarkable during the lastthree years, and this progress has borne its accustomed fruits in the increase of comfort and material prosperity among the people. Already the struggles and privations which had to be endured by the early settlers are almost forgotten or only remembered to be spoken of as things of the past. Eeviewing the history of the colony as a whole it is impossible to doubt that it affords a most successful specimen of colonization, bidding fair, under wise management, to reproduce at the antipodes a vigorous offshoot to the parent state. In those early days, as we have said, we escaped the usual financial embarrassments met with in most young colonies. Much was doubtless duff to the wisdom of our rulers, and something to tb^ very limited credit we then enjoyed. Hr much of this moderation was due to desi^a it is needless to enquue. If we "may judge from the aptitude displayed in the art of borrowing so soon as the chance of obtaining money seemed fairer, perhaps but little credit is due on that score. Our business now is to consider the present financial position of the colony, and to leave our readers to draw their own conclvsions. "We have no wish to prophesy evil, but we are mistaken if the time has not come when it would be wise to take stock of our liabilities.

When growing credit renders the task of borrowing comparatively easy the art is found so pleasing and seductive that it becomes only prudent frequently to check accounts, in order to keep the public acquainted with the amount of its indebtness. For this purpose we .have calculated the various sums for which powers have been taken to raise money either by the [General or Provincial Governments. The total amonut is no less than- six millions sterling divided as follows :—The General Government has borrowed, or is about to borrow, something approaching £4,000,000, for which in the way of interest and sinking fund it will have to pay £240,000 a year. The public debt of the province of Auckland will be about £600,000, for which it will have to pay about £48,000 a year. Wellington has borrowed at least £100,000, at a yearly cost of £10,000. Our own debt is at present fixed at £750,000 for which we shall pay £55,000 a year. Otago will owe £500,000, the interest of which is £40,000 ; and we may put Southland down for £250,000 at a yearly cost of £20,000. The total debt of the colony is therefore £6 c100,000, for which when it is all received it will have to pay £413,000 a year. Talcing the population of the colony at 150,000, this gives the sum of £40 owing to the foriegn creditor by every man man, woman, and child in New Zealand ; or, considering the debt as due by the adult male population, the sum of £200 is owing by every man in the colony, of whatever class or rank. This will be allowed by every reasonable thinking personto be an enormous ratio of indeptedness, though probably not more than can easily be borne and repaid in time by a thriving, growing community such as exists in this colony, if properly governed.

Of this sum of six millions, two-thirds is borrowed on the security of the whole colony. In stating this, we do not forget that the £3,000,000 loan is supposed to have a special security on the Waikato colonization scheme, from the profits of which the borrowed capital is expected to be refunded. The expenses which must attend this undertaking, the low prices of the lands, and the difficulties certain to occur in carrying out a novel plan on a scale of such magnitude, render any chance of repayment from this source so problematical that we are justified in considering the whole debt as a burden on the colony, the interest of which must be met out of ordinary revenue. The remaining one-third of the whole debt, amounting to two millions, is due. from the provinces, and of this not less than £1,500,000 is incurred by this island. The amounts are thus divided :—Canterbury, £750,000; Otago, £500,000; Southland, £250,000; showing our owu debt to be as large as that "of Ofcago and Southland together. A very important fact must be borne in mind, however. Canterbury has spent of its loan little more than. £100,000 as yet, nearly all of which has been actually borrowed, while our southern neighbors have expended in advance a, large portion of their loan, and are unable to float the debentures on the market.

That Otago and Southland nave anticipated their loans, and have since been disappointed in placing them, is a financial fact of the gravest significance which ought not to escape the attention of our Government. Already the G-overnment of Southland is reported to be insolvent. Measures of emergency are being taken to raise money; and in this hope the land regulations are said to have been hastily altered by throwing the land open to public selection. By what means Otago will escape a similar catastrophe we cannot pretend to say. Possibly it possesses resources with which we are unacquainted. The only one we happen to know of is the land revenue, and that is not likely to avail it. Even now a commercial crisis impends over Dunedin, and it has long been known that the diggers, as a class, do not invest their gains in land. Under these circumstances we fear that no sufficient help can be looked for from the land "revenue. And if not from that source, by what means can the course now being followed by Southland be avoided ?

The point we wish our G-overnment to consider is, how far will these provincial financial difficulties affect our credit? Already our loan halts in the market, and it fas, been found, n^qessary to a.d.d. tjO %\i§ ' . \

security by special enactment. We presume therefore that no more money is expected to be raised till the improvement in the security becomes known in London. That intelligence will be accompanied, and perhaps negatived, by the news that the Provincial Governments of Southland and Otago are in an unsound financial state, and it may still be impossible to float our debentures. Under this not unlikely conjecture wo Buggest that the reasonable and proper course is to wait the issue of events before embarking in undertakings which can be carried on only with borrowed capital. If our debentures are taken up we shall be little the worse for awaiting a few months, while we may save ourselves from the very undignified position now occupied by our neighbors. Then wo must always remember that we have actually embarked in a large work at a cost of £300,000, which, is only half completed. If provincial credit should be damaged in London by the reckless proceedings of other provinces, and we should be unable to raise the remainder of the money wanted for the tunnel, the burden will fall upon the land revenue. In such a case our resources will be strained to the utmost, but we shall probably pull through. It will be very different if we begin a railway and bridge for the Rakaia on the faith of a loan which may have to be postponed for two or three years.

It has been argued that, because a possible gold field has been found at the Pelorus, therefore Canterbury is to forget her propriety and rush into large undertakings for which she has not the means. "We demur to any such rash proceeding. In the first place we hold that the eft'ect likely to be produced on Canterbury by the Marlborough gold fields has been altogether over-rated. And even should it prove what some expect, the good effects will not be immediately fejt. The chief present result to this province will be to rid us of some surplus labor which we can spare temporarily. This will relieve the Government of a difficulty, and so far act as an additional reason for not pushing on public works at all hazards. In the course of time, if all the fine stories told of the Pelorus prove true, some of those who have made money there will return here and invest it iv land ; and of these not one in ton would turn away from his object should the Eakaia not bo already bridged. The credit of Canterbury has stood high because it has a valuable estate which has been fairly managed. It has no need to rush with unseemly haste into an expenditure which may risk its hitherto unsullied credit. It is known that we have the land and our neighbors to the North have not, and if they find gold and want to buy laud they must como here to get it. The land can never increase in quantity nor can it run aAvay. The only possible way we can see of stopping the regular course of our prosperity is to eater upon a large expenditure without first finding out whether we can get the money. Iv this way we may find ourselves suddenly compelled to raise money by any expedient, even by forcing our waste lands on the market at a reduced price.