The Waipawa Mail. Published Tuesdays, Thursdays & Saturdays. Thursday, August 2, 1894.

Waipawa Mail, Volume XVIII, Issue 3107, 2 August 1894, Page 2

The Waipawa Mail. Published Tuesdays, Thursdays & Saturdays. Thursday, August 2, 1894.

A ‘ CAPITAL” LESSON. The average dispenser of schemes for tho political regeneration of mankind is fairly endowed with nerve force, aud tolerably sympathetic. Properly equipped mentally, and set to work in the right channels, he would be capable of doing useful work. Yet as a rule it is unsafe to rely upon bis word, his utterances suggest the reverse of wisdom, and most people with anything to lose look upon him as not far removed from an advocate of spoliation. The reason for this is not far to seek. It is not that ho is of necessity untruthful, stupid, or dishonest, but that he is ignorant. Most of his errors are on the face of them the result of lack of knowledge. This is more particularly the case when he talks of capital and capitalists, and on this subject it is only possible to believe in his sincerity by more trenchantly discounting his understanding than is necessary with regard to less important topics. There is no need to enlarge. We are all acquainted with the philosophy which affects to look upon capital as a superfluity (in tho hands of its owner) and the capitalist as a being to be harassed and repressed. Exponents of this lamentable form of mental perversity delight to talk of the owner of capital as a sort of toothed and clawed griffin, possessed with a more than devilish desire to seek and devour. That the sensible among mankind simply laugh at theso absurdities goes without saying, yet unfortunately they aro not always in tho majority, lienee reckless politicians for whom ignorance cannot always be pleaded as an excuse, hut whoso conduct suggests a willingness to sacrifice tho most vital interests of tho colony if by so doing they may retain place and pay, do immense harm by pandering to the prejudices and animosities of the uninstructed. AVhat, for instance, is more certain than that the existing depression is largely due to the unwise legislation of the Government in the first place, and their still more unwise threats in tho second. Capital, which when in circulation may be compared to a fertilising stream, is proverbially sensitive aud timorous. This might be shown in a hundred ways, but probably the best illustration of the fact is what takes place when there is a “ run” upon a bank. A rumor is set afloat with regard to the stability of a financial institution. First one

and then auothor depositor hears that something is wrong. There is a rush to get their money ; the alarm increases ; finally there is a panic. So it is in a different way with regard to the threats which the Ministry have been making during the last couple of years threats about “ another turn of the screw ” and “getting at the capitalist.” Owners of money lent in the colony have become apprehensive, speculation and improvements to property are checked, and dull times are the natural couse quenca. If our rulers were wise they would adopt a very different course, and seek to encourage a flow of capital into the colony. One way to do that is to cease to represent tho capital already invested hero as the property of two or three bloated millionaires sitting in conclave discussing how (in the- phrase which does duty at mob meetings), “to drain the life’s blood of the country.” As a simple matter of fact, the larger portion of all the money invested in New Zealand represents tho savings of hundreds of thrifty persons, from tho housekeeper who has her little all invested in half a dozen or so of £lO shares up to tho man of moderate means with the equivalent of a couple of hundred such shares. All tho companies lending British money in this colony aro trading with the cash of such clients, aud instead of being monsters to bo destroyed are benefactors to be fostered and encouraged. They serve ah extremely useful purpose, and tend to keep interest down to a moderate rate. We could not have a better example of this fact than is found in the last balance-sheet of a company doing business in Hawke’s Bay. This is the North British and New Investment Company, which for the modest reward of six per cent per annum for the use of its money is largely assisting in tho work of developing the resources of tho colony aud assisting its settlers. This company was founded seven years since to. form a profitable outlet for the accumulations of thrifty persons. Its capital consists of 12,915 £lO shares, on which £2 is paid up, and £103,000 borrowed upon debentures secured by the uncalled capital. Nearly the whole of that money is invested in Hawke’s Bay, the actual sum being £122,380. And it is not lent in big sums to “ bloated ” people of any kind, but in 56 separate loans averaging a little over £2OOO each. Let any reasonable man consider the harm that would he done if, owing to the stupid actions of the Government with regard to capital, the persons who have borrowed those sums were suddenly called upon to repay them as their mortgages fell due, especially when it is considered that any action resulting in that would affect all sources from which capital could be obtained. The result would be more or loss complete ruin to numbers of the best settlers in the country, and widespread distress generally. Yot tho Government behave as if this was a light matter, and as if tho hundreds of thousands of persons who have their savings invested in companies doing business in the colonios were not as likely to be as apprehensive of the safety of their money as they would he if it were in a hank concerning whose safety questions had been raised. Tho balance-sheet of the company we have alluded to also supplies an answer to those who, either not knowing better or not willing to speak the truth, represent financial institutions as making an enormous percentage of profit. This company is a fairly representative one. For the year 1893 it had no losses, and all interest due was paid except £45, and that was received after the end of the year. If the agitator’s stories about enormous interest were true we should, under such favorable circumstances, see a big dividend paid. On the contrary the whole profit was £3,301 for the year, and after transferring £IOOO to the reserve fund there was left six per cent for the shareholders (£904 Is), and a balanco of £143 to carry forward. Neither were tho profits swaliowed up iu big fees to directors and in similar expenditure, for the whole cost of working, including manager, office and clerical business generally, both in New Zealand and in Scotland, and a total of £2OO for the directors, amounted only to £998, or roughly 15s per cent on the capital. There are other equally deserving institutions, whose existence is of the greatest assistance to our settlers, yet it is against these that Ministers are stupidly talking. Surely every thinking man must see that the Government are steering the wrong course, and that they have made quite trouble enough by doing so. Let the thinking men, therefore, speak at the next election, and determine to thrust from power a party which, while pretending to care for the interests of tho settlers, aro really doing all they can to destroy them.