VOGELISM JUDGED BY ITS RESULTS.

Clutha Leader, Volume II, Issue 98, 26 May 1876, Page 3

VOGELISM JUDGED BY ITS RESULTS.

(Canterbnry ' Press.')

In order to realise the financial condition of the colony, it is necessary to compare the original proposals of 1870 with the practical results arrived at in the present year 1876. We must get a clear understanding- of the nature of the policy to which the colony then committed itselfj and of the manner in which the policy has been carried into effect. Mr Yogel proposed that the colony should incur a gross expenditure of ten millions in the construction of railways and in carrying on an extensive system of immigration; the expenditure to be spread over a term of ten years, at the average rate of one million a year. Only six millions were to be defrayed by loan ; the remainder of the works were to be constructed partly by means of guarantees, and partly by payments in Jand. This sebeme underwent some modifications. The guarantee plan was soon abandoned. The colony, finding that it could borrow at favorable rates, preferred to construct the railways by direct contracts, at its own charges. And the project for the creation of a railway estate, though never formally relinquished, met with so little encouragement 'from the House that in practice it was allowed to drop. Taking the scheme thus modified as representing the policy of 1870, we may say that it involved a debt of ten million?, to be incurred by gradual instalments during a period of ten years. In preparing,, his estimates of revenue and expenditure, Mr Yogel counted largely on receipts from railways. He expected nothing to accrue from this source for two years, but in the third year he estimated the receipts at £10,000 ; and thenceforward he reckoned upon a rapid increase, till by the tenth year his estimate of receipts from railways, ovov and | nbove working expenses, amounted to ! £250,000. The money raised by loan was supposed" to cost on an average five and a half per cent. The total outlay would thus entail an annual charge' for interest of £550,000, towards which the rail ways would contribute £260,000, leaving- £300,000 to be paid out of ordinary revenue.

Here, then, we have two important principles. First, that the expenditure should be graduated so as to avoid exposing 1 the colony to any sudden or violent increase of debfc Mr Yogel laid stress upon this point. "It is essential," he said, "in order that we shall not proceed too fast arid undertake mpre than* our means will justify, that !vve should fix a very_effectual limit to tlip liabilities to be incurred." The second principle was that the expenditure should be so conducted that, as . the annual' cbirge approached the maximum, the burden on rhecolony should He correspondingly lightened by incomings from' the lines completed during the earlier years. We have next to inquire whether these. j)iinci|>lea iiuye bev.u observed.

Has the expenditure been carried on ir^ thegradual manner intended V arid are the railways contributing/ or in it fair way towards contributing, to the extent anticipated ? tfaifor tunii rely bot h questions must be Answered in the negative. The public debt of New Zealand on entering the financial year 1870-1, wa|s £7,556,216. To this it was proposed to add £10,000,000 for immigration and public works, and £1,000,000 for defence ; making in round numbers a total of £18,556,000. This was the ultimate indebtedness entailed by the proposed scheme, and it was not to be reached 1 till tie end of the year 1880. At the close of- the present financial period we shall be five and a half years through the term. Starting therefore with the existing debt of £.7,556,000, and adding the £1,000,000 for defence (the last instalment of which was to be raised 'in 1875) we ough*; also to add, according to the original scheme, the sum of £5,500,000 for immigration' arid public ''■ work ! , making the total debt up to the 30 .h June next up to .£,1 4,056,000. But the actual debt is very largely in excess of this amount. On 30th June, 1875, it was, according to the statement of the Colonial Treasurer, £17,421,106. There were besides about £1,200,000 of unraised debentures which would be ; required during tLe current financial year!, bringing up the total to £18,621,000. So that the colony has exceeded its limits by mor-? than four and a-halif millions. In fact* though : we ; are little more than halfway through the tern over. which the policy was- to .extend, we have already overpassed the extreme limit of expenditure contemplated under it. The money has been spent twice as fast, and the charge on the revenue has accumulated twice as rapidly as 1 was anticipated. Meanwhile there are no signs of the expected income. Mr Yogel, in preparing his estimates in 1870, put down the net receipts from 1 railways during the year now passing at £75,000. For last year he estimated them at £50,000, But the actual receipts were nil. For the present year, the Colonial Treasurer called the special attention of the House to the fact that some revenue at last appeared under this head. Rut he only ventured to estimate it at £20,000 ; and there are doubts whether even this sum, small as it is, will be realised." During the first six months the receipts from rail-; ways seem to have been little more than sufficient to pay working expenses.' Thus.then the matter; stands. 'The 1 railway policy was entered upon in 1870 with the most prudent resolves on the part of those responsible either for its administration or supervision. It was recognised that there was danger of being- led to "proceed too fast and undertake more than our means will justify ;" and the liability to be incurred was therefore carefully limited.. as.regards both amount and time. But heory and practice have been milfis asunder. In the excitement of carrying out the policy, the admirable spntiments with which it was initiated were soon forgotten. The expenditure was hurried recklessly on, without any heed to the prescribed limits, and with-; out the slightest attempt to proportion^ it to the means and resources of the 1 country. We are now where we were ; intended to be in 1880. In five years the colony has taken on itself a load of: debt which was meant to be the growth often". And while its liabilities have; thus been prematurely magnified, its expectations of .revenue; arising from the expenditure and assisting to defray: the charge created by it, have so far; been entirely disappointed.