The Waipawa Mail SATURDAY, NOVEMBER 23, 1878.

Waipawa Mail, Volume I, Issue 21, 23 November 1878, Page 2

The Waipawa Mail SATURDAY, NOVEMBER 23, 1878.

During the past five or six years things have been so prosperous with all classes in New Zealand that not a few have deluded themselves into the belief that it is good for a nation to be in debt. “ The National Debt has made England,” is an impression which political economists have labored in vain to remove. That borrowing to the utmost limit of credit has almost ruined Russia, Spain, Turkey, and a few other nations never enters the popular mind. England and France supply ample evidence on the other side of the question. Since the disastrous war with Germany, the French debt has been the largest in the world, being £900,000,000, about £150,000,000 above the National Debt of England ; and yet France is in a highly prosperous state, though a revenue of close on one hundred millions sterling a year is raised from the people. But the fact should not be overlooked that nearly every halfpenny of interest on the national indebtedness goes into the pockets of Frenchmen. The same applies to the English National Debt. Besides, in both these countries there are large stores of accumulated wealth. Here it may be said we live from hand to mouth. In this colony the whole of the interest on loans is sent out of the country, and it is that which marks a wide difference in the nature of English and colonial indebtedness. • If a nation’s prosperity was to be measured by the amount of its liabilities, then New Zealand would be in an excellent p'osition. The National Debt of England amounts to about £25 per head of population. The following table will show how far the various Australian colonies have exercised their borrowing powers:— Popula- , . Ueht tion. Per £ Head. Victoria ...840,000 17,071,382 £2O 6 N. S. Wales ...629,776 11,759,519 18 13 S. Australia ...225,677 3,837,100 17 0 Queensland ...187,100 6,948,586 37 2 New Zea1and...399,075 20,618,111 51 13 The foregoing table is an extract from a paper written by Mr Eangton, < an ex-Treasurer of Victoria. Sinee < the figures were compiled, fresh loans < have been authorised in New Zealand, ‘ and it may he calculated that within ’ the next three or four years, the j colony will owe its English creditors , between twenty-four and twenty-five , million sterling. In the past the t debt has increased in greater ratio r than population, and before the Pub- 5 lie Works scheme is completed (that 1 is if there is to be any finality to bor- * rowing), the State will owe £6O per I head of population. There is one c thing very clear that as the debt e swells, each succeeding loan will be v

obtained on more disadvantageous terms. The credit of the colony is at present at a lower ebb than any of its neighbors. Within the last three years four of the colonies have put four per cent loans on the London market, with these results :

„ Net price realised. 1875 New South Wales ... £92 2 6 1876 Victoria 94 18 4 1877 Queensland 90 17 6 1878— South Australia ... 95 0 0

In 1875 a New Zealand 4|- per cent, loan was placed at 93, while New South W ales in the same year obtained £92 2s 6d for a four per cent. loan. Mr Langton contends that there is no room to doubt that investors in England are influenced by considerations of the indebtedness of the various colonies in relation to population. He says:— Apart from the consideration of relative indebtedness, there does not apSear any reason why Queensland ebentures should be worth 4 per cent, less than those of Victoria or South Australia. The same remark applies to New Zealand, whose case is still worse; for 93 for per cent, loan is fully 7 per cent, below the last prices obtained by Victoria and South Australia, even though the higher price of money in 1875 is taken into account. “ Assuming, then, the normal price of Australian 4 per cents, to be about 95, it would seem that, because Queensland is in debt to the extent of £37 per head, she is mulcted in a Bum of £40,000 hard cash on every million she borrows in London; while New Zealand, because of her still heavier indebtedness, loses £70,000 on every million raised in the same place. An addition of nine millions to the debt of Victoria would bring our national debt up to £26,000,000, and our indebtedness per head to upwards of £3O; or not far below that of Queensland in 1875. It would, in fact, take Victoria out of the category of colonies with a small indebtedness, and place her m the same list with Queensland and New Zealand.” If English money lenders continue to forms their ideas of the solvency of New Zealand by the amount of indebtedness per head of population, the position will soon be that this colony will be unable to borrow except at a runious discount. Already the price we have to pay in advance of our Australian neighbors is somewhat startling. Seven pounds in every hundred is indeed a very large difference. If New Zealand is to preserve its credit, Parliament must be chary for some years to come of sanctioning any considerable addition to the colonial debt.