The Temuka Leader SATURDAY, FEBRUARY 13, 1886. TEN MILLION LOAN.

Temuka Leader, Issue 1467, 13 February 1886, Page 2

The Temuka Leader SATURDAY, FEBRUARY 13, 1886. TEN MILLION LOAN.

It is currently reported that (he Government intend to submit lo Parliament next session a proposal to borrow another ten millions. The purposes for which it is understood the? inl.nd to borrow this money is to construct the East and West Coast and Nelson 'inns of railway, the Otago Central lino, the North Island Trunk line, and to finish other lines. They also intimal'' that they will purchase large estates, which stand in the way of settlement, cut them up into small farms, and settle on them men who will cultivate them. To borrow money for the latter purpose in not at all objectionable, Money thus invested would, of course, pay for itself, and yield immense benefits to the colony. But to borrow, to pursurt the policy of the past would be the height of madness. No sane man could ever countenance such a thing. The annual interest (n £10,000,000 would amount to half-a-million, and that would have to be raised by means of increased taxation. There is no other source from which it could be acquired. These lines would not pay for a long time, and consequently in the meantime the interest on the borrowed money would have to be paid out of taxes levied on the people or out of the loan itself, wLich would lead to complete disaster. If the Government go to the country on this policy, we are afraid the people are just in the temper to vote for it. The laboring classes have been driven to the verge of desperation, owing to want of employment, and as a borrowing policy holds out to them a hope of \>hat they so much stand in need of, it is probable they would vote for it, Farmers are crushed down by a usurious rate of interest and low prices. They may possibly say to themselves : " Borrowed money brought us prosperity before, Why should it not do so again ? Something must be done ; we will try the borrowing policy." Speculators holding large areas of land will vote for it with a view of selling out and leaving the colony. All interested in railway construction will, of course, go heart and soul for it, because tbeir properties would be improved in value, and the moDey spent locally. There is therefore a danger that if the policy is submitted to the constituencies n majority will be in favor of it, and if so New Zealaud will not henceforward be fii to live in. Our national debt is at present the largest in proportion to population perhaps in the world, and if it is to be increased the result will be serious. It must be borne in mind that in making this statement we have assumed that the money would be spent as unprofitably as it has been in the past. Is employed in other ways we would be ready to agree to it. For instance, if the Government would established a National Bank, and take up the mortgages on land, and reduce the present rate of interest, the money wonld be employed in a way that would at once be profitable to the Government and beneficial to the people. Again, if large estates were purchased and cut up into small holdings, and perpetually leased to bona fide settlers at a rental of 5 per cent., the Government would get immediate returns for their o»ouey, and land settlement would be promoted. And if this scheme were extended so as to provide homes for agricultural laborers on the lines we have so frequently laid down, an immense amount of good would ihus be done. To carry out such a policy as this we should not at all object to borrow money, but £10,000,000 would not be necessary. If a National Bank were established, half the amount ivould be sufficient to build our railways, take up mortgages as they fall due, settle the people ou the land as indicated, and do everything else necessary to be done. The position, therefore, is : If £10,000,000 is borrowed now, in five years we shall want more ; if a quarter that sura wero borrowed and a National Bank established, we should never again want to borrow one cent. In fact, in a short time, if we were to manage our business properly, we would be in a position to lend to the other colonies. But, of course, the people as a whole have never had this policy placed before tbem, they know nothing about it, and consequently they will not vote for it.