NEW ZEALAND'S INDEBTEDNESS.

Waikato Times, Volume XV, Issue 1323, 21 December 1880, Page 3

NEW ZEALAND'S INDEBTEDNESS.

The London Times of a late date has an article on the subject of colonial indebtedness, in which the great frequency with which Australian loans have recently been istffted is commented on. The writer refers to the letter of a correspondent, who suggests to English capitalists certain inquiries before subscribing to colonial loans. The point to which he wishes to call special attention is the manner in which those loans are expended. They are, he maintains, spent on what are called reproductive works, "that is, for example, in railways which, after construction, do not pay. . . . The money is thus spent without a profitable return, and when spent another loan is sought for, urged by similar motives and with a similar result." The remedy for this alleged evil lies, the writer suggests, in a portion of the money borrowed being spent on immigration. The security of the English capitalist would then consist * 'not of waste lands alone, but of a combination of labor with those waste lands, and extracting a profitable return from them." Commenting on the letter, the contents of which we have just summarised, the Times admits that within recent years the indebtedness of the Australian colonies has certainly increased at a rapid rate. But although there may be room, the writer thinks, for some caution on the part of capitalists in lending to those colonies, he does not consider the particular caution of his correspon ent to be altogether well directed, as, " far as the majority of the colonies are concerned." Their indebtedness he says, "excluding the colony of New Zealand," may be put down at £25 per head, which ifl not greater after all " than that ot the United Kingdom, where the burden of the national debt is really inpercepnble. " He then goes on to point out that the colonies have securities in the shape of railways, waste lands, and so f orth, which the mother country does not possess. And even where the colonists poorer jjer head than the population of Gr«at Britain, he holds that their material progress is f>o rapid, and the accumulated wealth so great, that their indebtedness, as a rule, is yet "only a bagatelle, and the public debt cannot be described as assuming an ominous aspect." But while declining to endorse the opinion of its correspondent, the Times holds that there are obvious reasons for caution respecting Australian borrowings, and that "it will be a good thing for all concerned if they are checked for a time. " These " obvious reasons" are very tersely put in the artic c before us. "Itis a misfortune," the writer says, "for any country when its industrial organisation is such that a material part of the employment of labour is supplied by means of public loans. This constitutes the State a great employer of labour, a circumstance full of danger even when the means of employment are supplied out of taxes, but which becomes doubly dangerous when loans are the source of the employment." The conclusion arrived at is that, although the situation is not at all ominous, there are sufficient reasons why the Australian Colonies should "hold their hand " for a time In the matter of borrowing. The writer, however, is careful to make it quite plain that, in his opinion, if the opei'ations are kept within moderate limits it is right and proper that the Australian Colonies should, from time to time, borrow for the development of their resources. The Tuva, it is worthy of notice, carefully excludes New Zealand from the list of colonies which are mentioned with approval. Our exceptionally heavy bor.owing is commented on, and our present position is held up as a warning to those inclined to follow in our footstep*. We are specially referred to as furnishing a proof that the recommendation of the correspondent of the Tunes as to the manner of spending 1 a portion of the proceeds of loans is, to say the least of it, not altogether satisfactory. A considerable portion of our borrowed millions has been expended in the "direct enconragement of immigration," as well as upon public works, yet it cannot be Raid that we are flourishing position depicted by the South Australian enthusiast for the extensive introduction of immigrants at the Government expense. The most that can be said for us is that we can pull through if v/e are only careful and prudent. But that the magnificent expectations indulged in ten years ago have landed us in embarrassments of a serious nature, is patent to the least observant of onlookers. "It may be hoped," says the writer, " that there is no danprer of a collapse even in the case of New Zealand, but the circumstances of this colony are certainly not so favourable as those of the others, and it is hound now to show its ability to pay its way during some years of absolute rest from borrowing." Now we are not by any means quite certain that the colony will do anything ot the kind. On the contrary ie seems to be taken for granted in some quarters that at the earliest possible date we shall be figurinar once more on the London money market. The gambling spirit which the last ten years' extravagance aroused i« far from bein<r completely eradicated vet, and if the slightest opportunity offered itself, people would be as caper as ever to secure once more a share of the golden shower which borrowing brinprs about. They soon get tired of the common-place work of making ends meet. They get exasperated at economies practiced at the expense of their own localities or districts, and easily lose sight of the truth that it is by small reductions here and small reductions there that the colony can be brought back to a sound financial position again. They forget all that, and begin to display impatience with the men into whose hands the thankless task is committed of making those unpleasant savings. And so it happens that the public mind comes gradually to regard retrenchment as a great nuisance, and perhaps after all not worth practising. We do not assert that opinion in this colony has reached that stage. But there is some danger that it may. The" fact that the means at our command are known to be limited, does not in the slightest degree abate the demand for the expenditure of public money. The claims of localities are urged with as great warmth as ever ; and when Ministers are compelled to refuse all and every application for help, the refusal is in too many instances treated as a slight upon the district. The result is a fresh addition to the number of the discontented. Whether when the time for a trial of strength arrives, such malcontents will regard it as their duty to join the ranks of those who are looking forward to the downfall of the Ministry, we do not pretend positively to assert. The opponents of the Government make no secret of the fact that they are trusting to this cause to help them to victory. We are inclined, however, to think that for once they will be mistaken. At a time when no great national question is at stake, men may grumble and mutter rebellious words, and maj appear to lose sight of the welfare of the colony in their anxiety to promote local ends. But the majority of the people have not forgotten the scare which they got by last year's exposures, and when it comes to be a question of retainin* the present Government in power, 01 trusting the fortunes of New Zealand in th« hands of the men who so nearly ruined lier a year ago, we are confident that the elector* will make a pr«per choice.—