THE WAIRARAPA STANDARD WEDNESDAY, OCTOBER 1, 1873. PUBLIC LOANS AND PUBLIC CREDIT.

Wairarapa Standard, Volume 2, Issue 112, 1 October 1873, Page 2

THE WAIRARAPA STANDARD WEDNESDAY, OCTOBER 1, 1873. PUBLIC LOANS AND PUBLIC CREDIT.

So the fr&virtcial Loan Bills, which vere so- bufriedly passed, by such •ovemlwlffingifejomies. fri ihe i t' all smwarily rejected! Omncil. .At our present-writing we ii*> not know wbatepurseihe Gpverni: runt If*ji* 'W# ‘not abandoned frequently its avowed i i:tuitions we should—take-it for • anted -that , wpuld .be |.nrogirl& £ nT‘ortioi* 'enable the <luvernment .tQ^.introduce a Bill to « able tire : JWrihcesih borrow money lor reproductive wogks-oipthe .sqcur. » ;iy of a Broperty Tax!' a We do not i-'iicaiv»that hdvei-Ibsen* smy difficulty in tbef'royinees'borrow i ur money under the'rije’ctedr Em-, lowering Bills ; tbere ia ho doubt i mt Ibe mouev eoulifbe more Tavori ‘i!y CdloniH GbVernnKMit, Nor do we conceive that the t ’.tlony, whetlsao4H- law r -or --'equity, uruild be bound to -pay Provincial <!rbta-~itiUilrw. tbmk-Mt-i-would have l -“ii morally bound to have enforced luo paynmntpfssub debta, seeing.,that liiej womdnavebeen contracted under i‘s authority.’ 'Whether the -Colony t. i boao^" : iffignefc -pit- tTjei* ywa .i.munfj care snoululbe taken that the' i.i (cable property the -district, or ii isi ricta; WllmOT :, finy > %Tt'K i ldafi“ ir i-vpcnded, he‘ made ultimately liable f r its repayment,^vA of u -oemly scrambling Yor the'expendi- * “ IV oral Provinces would, have Jieen a v nided if-saeb a principle in : th© first i ■=taoß6‘Bid t b^'T^^y- ; i. >H»eir Lbjrn r -ennt, or to borrow oil'the:Colonial r '(lit care should be taken .to .exact ■ M'le security for tb# rifAiyment of ■3 debt. Of cquraq.thg more ample security onlFeff mofdfaVorably j uld the loan iebtained, whether I • ra the tcapi- :: <t. But ia-l«timaHrig the amppnl uch security, whefhegE .^aateknda, ' bor .it ild be only fair torestitßate’ ft' not i i present but •i ze, out at whit it woula be woifh - • r the works, it.ejras intended to . struct had been complet^^j

It appears to us that the intention of the Ministry .to reverse the policy which hasbeen so long acted upon, by permitting the borrow oh their own account, must be abandoned. The most telling argument in f|vor jof the Colony borrowing the money required for Provincial undertakings is that the loans thus obtained could be negotiated on much more favorable terms. This cannot be disputed ; but then it is urged that the Colony will not be able to negotiate its own loans so advantageously it it undertakes also these additional liabilities. We do not think that there is much force in this argument, if it insists upon obtaining from the Provinces ample collateral security. There are, it truth; many erroneous notions currenl .relative to the basis on which public credit rests, as well as regarding the effects which taxes expended in increasing the value of - the rateable property of the- district- have on its permanent prosperity. It is constantly assumed that character has everything to do with- public credit, whereas it is at best but of secondary consideration. It is not the willingness tp pay but'the ability to pay which

the public creditor requires to be satisfied about. Ah affluent knave is a pre In private transactions it is true that a person 'of good character could; get credit where a person of bad character could not. In such cases the former’s word is better than the other’s bond. But the member of the Stocic Exchange, and eyen the ordinary money lender, care less about the character of the borrower than the nature of the security offered—the -better • that is the-easier is the loan negotiated, and the less the amount of interest demanded. -What be requires to know is whether the borrower will be able, when the time arrives, to meet his engagements, and if not what means exist for enforcing their fulfilment., Dr’Eranklin represented credit-as equivalent to money, and by one of his homely illustrations ho attempts to show that credit is dependent upon -character. He says, and says truly, that the sound of the blacksmith’shammer heard regularly at the forge at ‘5 o’clock in the morning will establish his credit when the sound .of his voice heard as regularly at the tavern would ruin it. .But the merchant, or money tender, does not give him credit because he. believes he will be able to pay his debts. If he could offer better security,’ the tavern brawler could obtain more credit, and on better terms, than the sober black'smith. Character, in truth, has not so much to do with such.-, negotiations as people, by-dint of constant repitition, have been led to believe. An opulent natiob, ora flourishing colony, with vast natural resources, that only require the application of capital for their development, can now obtain, ■ on equitable terms, 1 , any amount of credit it may.require, The amount of the interest depends on the extent of the risk, and on the facilities which .will he afforded to realize it if found desirable, To hear our legislators talk one would think that the waste lauds of the respective Provinces were the only security they could offer for the payment of their debts. Some time ago' the .LondonV" ‘Times’ pointed out that property yyhich will ,-yieljino revenue, ahd can be neither alienated nor mortgaged,., yet constitutes potion vpf; the t pptetei wealth, and that a.country ; which was rich in roads And “public works possessed in reality, a public, fortune. The! roads' ah<f:bri<igS9 of this Province not ohlytennstittftete pofSoil of her wealth, . but could: be rendered a source, if necessaiy, of .public ;in-., come, and no insignificant security for its public liabilities. - This is also •*rde with regard- fo all realized property within its boundaries.' ! - When Sycfney Smith, endeavored" to show hom easy it was for Pennsylvania to pay if she chose, the debts she had repudiated, he did not enquire' what wasi the amount-of her public' revenueor what were the extent and value of her waste lands, but; what the total, /nfeome of the .State from all sources amounted to, and what, proportion the public debt bore, to the net income. The fallacy wfiich Jurks under, all the croaldngs of the Sewells, Kennys, Whitmores* {itut. others ’originates in the suppositioh that th 6 wealth of the cqtenywill nofkeep pace with its public indebtedness, and that there, are no other legitimate and fruitful sources .of. .revenue besides those, which have been made available,, for this object. .^Xt_is. probably true that taxes on: imports cannot be raised any higher than they are at present without diminishing the revenue derived fro pi this sdurce; but' if these particular taxes cannot be increased, the revetiue, by fheif augmented consumption, may bo indefinitely extended. . Nor should it be lost sight of by those ..who 'complain of our, heavy taxation that.cme half: of the duties levied at the Custom House are upon articles which; are not necessary tor hdman subsistence 'of human happiness. When tpe amount contributed to':the -general revenue by each ’ individual is compared with the amount of his -income, ’’ which is the ' best' Criterion' by which his Capacity to bear taxation can,be judged, it, is hot really of that magnitude .as it doubtless appears rwhea cOmpafed only with the amount, r of. thq .population; and however neaVily ' it J may be .felt by

those members of the industrious I classes who hare large young families ■ upon whose -shoulders the larger ( portion of . this burden rests, it falls . but lightly upon those who derive the ; most benefit from the impost, whether such be viewed as an insurance premium, or compared with the value of the income out of which it has to be defrayed. Hitherto the contributions of . the propertied classes to the Colonial Chest have been, infinitesimal in amount when compared with those they have had to pay to their agents or brokers for the means of obtaining those advances by which they hoped to secure their own individual . aggrandizement-at the cost of the present and future interests of a country in which they may be con-! sidered rather as temporary sojourners than : permanent, settlers. All - the hubbub which has been raised about the colonial indebtedness has been

prompted by those who either wish to escape from paying their fair share) of the general taxation, or. .who hope, to acquire some political capital by representing the taxation and in- : debtedness of the colony not as they appear When compared, with .ritSi. income and resources, but as they look when viewed through the spectacles which they have s i considerately provided for our use, and which they ( have for that object ingeniously con-' strncted with more than ordinary magnifying power;'^h^naucb'apeffeteGovernment as such’a* revolutionary one as that of Mexico, such a dishonest obe ‘as that of Hew ■ York, and such an unstable one as that of Franco, cab' negotiate largo ] loans on favorable tertns there is no j feUr that this colony will not be able j to do so. What is really dreaded is not that the colony will not be able to meet its engagements, but that the propertied classes will in future have to'contribute their fair quota for this necessary object.