TEN YEARS' PROGRESS.

Dominion, Volume 5, Issue 1447, 23 May 1912, Page 4

TEN YEARS' PROGRESS.

PRODUCTIVITY, POPULATION, AND EXPENDITURE; fßv CI. K. Si-alks.] There are probably few wlio would refuse to admit—notwithstanding differences of opinion with regard lo'srme of its legislation—that this country lias enjoyed for no inconsiderable period a marked degree of prosperity, and (lie increase ill oversells trade, the extension and improvement in various public and municipal services., the substantial increase in Savings Bank deposits, and the ready response to most of the demands for increase in wages, will doubtless all have helped to produce what not improbably has been an almost universal feeling of prosperity.

In a country such as New Zealand, which is so largely dependent upon the product of the soil, it would not be unreasonable to assumo that no better guide to its progress could be found than the value of its exports, and therefore such an increase as was shown in the returns of these for the year 1910, as compared with those of a decade earlier, might reasonably ho accepted as a warranty for entertaining a. firm belief in the continuation of its prosperity.

The total declared value of the,exports for the .year 1910 was X 21,944,963, whilst the figures for the year 1900 wore only about ,£13,035,249, thus the later period showed an excess over the former of approximately .£9,01)11,000.

the figures above must be accepted as correct—subject only to the alteration of such errata as may reasonably be expected from the fact that these figures are main')" estimates made before the proceeds arc actually knownit must be. admitted tint the exports for 1910 were not only a record for the Dominion, but so much so that they were far awl away larger than for any previous vear.

A factor which must not be lost sight of when reviewing the position of the community in relatbn to any increase in productivity as shown by its exports, is the market value of the goods exported, as. whilst the methods of production and preparation, as well as the mode of delivery, will doubtless affect the prices to be obtained, the value of such goods in the outside markets of the world is based upon and is subject to conditions over which the producers neither directly nor indirectly have any control, aud these values jiot only may, but do, fluctuate considerably, with the result that the figures representing the exportable value for any one year may be oither considerably above or considerably below a fair average value, and therefore as an index to the actual productivity may be misleading.

The Basis of Comparison. Tn trying, therefore, to arrive at the actual 'measure of productivity, or the increase between any two periods, a more reliable result will probably be obtained by examining the average of a period of, sav, three years, and it is proposed, therefore, for the present purpose to take the figures for two triennial periods of as nearly as may be the last decade as given in the Blue Book for 1910. the Vear Books for 1901 and 1911; and' the Trade Review for 1912. .

: Whilst the result based upon a comparison of two triennial 'periods will doubtless bo more reliable than these of annual periods merely, the element of market fluctuations will not necessarily be deleted unless values are entirely omitted from the statement; such a procedure, ninonming merely,, to : a : comparison of quantities, would, of course, show the difference in productivity lictwcen the two periods fa- each article of export, but without some common denominator, such as value, there would he some difficulty in arriving at' a satisfactory conclusion as. to' the measure of progress between* the two periods, as frequently an increase in one article of export will be accompanied by a" decrease i,n another of a totally different basic value. So, in order therefore that the actual measure of increase may be at once comprehended, the values shown in the following statement for 19IW-10-11 are on the same basis "per unit" of quantity as those shown in the table for 1900-01-02. So as to-show the effect market values may have upon the statistical ■ returns, a third column is given, in which appears the average value actually returned for the various classes of exports enumerated.

Owing to the "quantities" of somo of the minor articles of export not having been published in the statistics, it has been impossible to apply the principle of n "unit value" to all, those omitted are grouped in the statement, and shown as "sundries," but as the total value is only equal to about 21 per cent, of the whole, the effect of the comparison is not likely to he materially affected by showing the actual retnrncd or declared value. Gold and minerals, including silver, have ljcsn fhown in the same manner. Our Main Products. -V glance at the statement will, however, show that it has hem so arranged as to at once make clear the actual ratio of increase, in productivity cf all. the main products, and that separate totals for what may be termed pastoral and agricultural products respecrhtsOy are given.

' Though the system adopted of "averaging" has certainly resulted in a "loninpdown" of the vast increase displayed by the comparison of the results of two individual years, it still' shows a very considerable increase in the value of the country's exports as between (lie two periods, the actual value fur 1900-1-2 being i.nly a little over .£1:1,000,0(10, whilst for IOO'J-10-11 if. had risen to over .0,000,0110, an increase of ,£7,000,000, equal In-, about 51 per cenl. The actual productivity, though showing a-largo i'ut crease, has undoubtedly had a brilliant colouring lent it hy an increase in market values, as I he actual quantity of goods exported during the later period, if taken al the identical values returned for the same description of goods in the former period, would only amount to slightly over JiIG.GOO.OOO, which is nearly .£3,500,000 less than the actual value returned, although .C1.a00.000 above the value lor 1900-1-2. Thus, whilst the actual market conditions have enabled an increase to be shown in our exports of SI per cent., the actual increase in the quantity exported only slightly exceeds 27 per cent. With the exception of hemp and grain, all the products have enjoyed a substantial increase in market values. -whilst in respect of quaulity. lamb and cheese show (h« greatest actual increases, each with an advance of about ,£7. r >o,ooo, being at the rate of 330 per cent, for cheese, and 100 per cent, for lamb. The average increase in productivity—i.e., outside the question of value, of pastoral and agricultural products i* a little under 30-per cent., hut "•rain shows a substantial decline—considerably over 50 per cent. Averaging Values. The application of the principle of aver•.■Hii" the results of a number of years in 'order 1 to ascertain a fair idea of the position is not without precedent, the Courts of this country not infrequently largely their awards in compensation cases

under the Land for Settlement Act by averaging the net returns from tho property over a period of years. The tendency of this process is undoubtedly towards a "lovelling-down," and whiN't the effect is to somewhat dim the roseate hue that may attach to tho results of any individual year, it will not be denied that if the principle is sound, as applied to an individual agricultural or pastoral properly for ascertaining the wealth it produces, it must lie equally sound when applied for the same purposes to the country as a whole, the wealth of which is dependent, mainly upon the aggregate results of its individual agriculturists and pastoraliats.

Whilst the average shown for 1900-10-11 is undoubtedly a substantial sum iu respect of the "actual value" (being only some .£2,000,000 less than the year 1010), it is, if taken on the basis of quantity, approximately J:3,iiofl,ooo under that year, though about; .£3,500,000 more than" the year 1900. i.1,500,000 is- doubtless in itself a considerable sum. but that fact alono does, not necessarily ensure (hat as representing the increase" in the. country's productivity it is adequate, and, before applying this term to it, it. may be advisable to ascertain whether satisfactory evidence is forthcoming that the amount is commensurate with such increases in those factors necessarily employed in its production; and accordingly a review of the figures dealing with the population, expenditure, and land for both periods may not be considered out of place.

If might not be unreasonable to assume that increased expenditure alone, without, greater population or area of land, would result in increase of productivity, and in a country where ihe cry from one end to the other is for "closer settlement" it will hardly be denied that moro peopio on tho same area should increa.se the production, though tho fact that an increase in expenditure is a necessary concomitant may be lost sight of by some; and it is improbable that even the most ardent supporter of closer settlement would attempt to denv that an increased area of productive laud could result in greater productivity oven supposing there is no increase in population. Course of Population. The population of New Zealand in 1900 was 762,278, and in 1910 1,002,070, showing an increase of 231,-101, being at the rate oi 30 per cent. This increase is almost in direct ratio to the increase of actual productivity, but only about one-third of tho increase is credited (o the "county districts, while two-thills have gone to swell the number of occupants in the boroughs ami cities, which now have, in point of number,, a large majority over the "county." districts. In a voun'g country such as New Zealand, whero the great bulk of the land, at any rate in the first period of its earning power, is necessarily far below tho full measure of its productivity, it may be seriously questioned whether during a decade it would be unreasonable to expect a very considerable increase in productivity, even with practically no 111creaso in population, and more especially so if the facilities assisting production have been, materially improved. In considering whether, iu view of this admission, the increase in the population during the last ten years shows, in Hie matter of production, a satisfactory result, it must bo borne in mind that Before arriving at a decision it will be necessary to review certain extraneous circumstances, amongst which will be the relation of imports and local industries to population. In this connection due allowance would have to be made ;or a proportion of the population being 'consumers" onlv, consisting of such quota ot the people as are supported through the expenditure of loan money; also thai, section of the community who live on incomes not earned in this country, i.e., not the product of-labour expended here.

Expenditure. To arrive at this factor it will be iicces-: sarv to take into consideration two distinct classes which may be. termed "capital" and "working expenses" respectively. There does not appear to be room for any exception to be taken to tins proccumc, inasmuch as the object is to ascertain what increase, both with regard to liability and expenditure, has taken place during tho period under review, though H is not improbable differences of opinion may exist as to whether tho period of timo is sufficient to allow of the totai expenditure being fully reproductive or, in other words, if there is justification lor expecting that the ratio of further ' liaoiiity and expenditure" to tho measure ot productivity will be maintained. A,though it may seem at first blush as though a process of double-banking were being adopted, a little reflection will showthat not onlv must money borrowed, as representing capital expenditure, he taken account of, but the disbursement of the sum received as internal revenue must also be included as representing what, in a private concern, would be calied working expenses." Public B£UT. ' The gross public debt of the Dominion for tho year ending March 31, 1901, was £M,591,245, whilst for the year ending March 31, 1911, it was .£81,078,122, nn increase of J!31,45(i,877, equal to about 63 per cent. It may be claimed that the figures of the gross debt should not be taken, as there is an amount accrued in a sinking fund of nearly .£3,100,000, but with the exceptiion of about JE-100,000 it would appear as though the whole of this fund was invested in the Dominion, and it is doubtful at least, whether for the present purpose tho deduction of any amount for which the Dominion is liable would be. justified. It mav be claimed on the other hand that about of the public debt has been raised within the Dominion, and that, therefore, it is improper to treat this as a liability of the Dominion, but it

tines not-appear to bo staled wuether any part of this sum. whilst minimally raised within the Dominion, hn* been actually borrowed from institution:-of foreign constitution, hut with resident representative:; here, but whatever the allocation mav be the lenders, whether resident or mm-resident. will have to he repaid, a liability for which the Dominion asiMyiiolc ia eloarlv responsible. Moreover, it is undoubtedly a tout thai n largo proportion lias been borrowed from the Savings Bank and must be recognised as a.primary, liabilitv. as it is (dear that liio depositors in the Savings Bank uuist be repaid in cash, wliii,--t—revorhnE again to the sinluns-r fund-it is: not equally clear that investments in a ioe-al body or corporation would necessarily always he worth their par value. The revenue for the year ending March 31 lont was. npnroximalely, X5.000.0fll), and for' the year oniliin: March 31. mil, approximately .£10,300.000. Whilst tno h«ures stated represent the approximate sum received by wav of revenue, before the actual' amount of what has been described as "working expends" can lie arrived at some additions and .Reductions will have to be made which will reduce tho expenditure for the first period tr. £5 100 000 and for the latter to ,Efl,Soo,(tf)o, showin" o net difference of JM,lfl»,ooD, equal to about 81 per cent. Those fißiires arc arrived at after incliuliiijr interest payments under certain specific accounts, such as "land for settlement," and excluding sums that have been transferred out of revenue, to the public works fund, and deducting a bahv.ee of revenue not distributed during the latter year. Whilst it might not be necessary to admit that the expenditure of interest, due on loan money obtained for the purposes of either purchasing lands or advancing to settlers, comes directly within the range of what may be considered aids or facilities towards increasing production, any more than if such investments are in. the. hands of private indiyiduais, it iviii not be de.

nied that whilst in the latter case no liability for the payment of cither interest or capital attaches to the community, this cannot b!> maintained under 'the existing circumstances. Mi'xicipal. Another item by way of expenditure io be taken, into consideration is the in-crea-e, both with regard to loans and disbursements, of the annual revenue of the various governing local bodies. It may possibly bo questioned whether the inclusion oi' these items is justified, and it might be diilicult in some instances to show the exact connection between the disbursements and the question of productivity, but it would be reasonable to assume that both loans and revenue received are spent in such a manner as will directly or indirectly assist in the development of the country. The total liability for loans (excluding those raised from the Government) was, approximated, on March ,'11„ 1000, ,£7,067,000, and March 31, 1010, ,£!4,937,00f1, being an increase of about ,-£6,000,000, equal to about 111 per cent. The expenditure from revenue was aproximately, for the earlier period .£1,413,000, and for the latter .£3,201,000 an increase of about ■£1,85(1.900 equal to say about 130 per cent. It is not improbable the figures under tho heading of expenditure (both public and municipal) may bo considered somewhat startling but. it must not be forgotten (hat beyond the increase in productivity already realised, there is such iu the shape of what may bo looked upon as permanent assets, such as extensions and improvements in facilities for transport, that will be available foe use in the further productivity of the country. On the other hand it may be claimed tiiat in view of the closer occupation of the land and tho period of time over which the increase of expenditure has bcei! spread, the fullest, measure, of the benefits to be received will not be commensurate with the expense incurred, but iu this connection it should bo pointed out that barely" 40 per cent, of tho increase in the public debt was incurred during the first half of the period. Land, The iota! area of occupied productive land in Now Zealand in 1000 was 34,911,573 acres,-and in 1010 was 40,233,135.. acres. This shows an increase of about 5,320,000 acres, being equal to about 15 per cent., and if it could be shown that the average capacity for productivity in this area is equal to the average of the remainder, it might be held that the increase in area is sufficient to account for practically one-half the increase in the agricultural and pastoral exports, but it will probably be'claimed that an increase of productivity in exact ratio to tho increased area could not reasonably be expected without some increase in both population and expenditure. . From an examination of the statistics for 1000 and 1!)10 it will be «een that during the two periods there has been an increase, of about 900,000 acres of land brought under the plough; and of this increase about 420,000 acres are either in grain or fallow, the balance- being laid down in grass. The remainder of the increased area—some 4,300,000 acres—is land that has never been ploughed, nnd comprises about. 2.550,000 acres of .surfacesown land, and about 1,500,000 acres of (ussock and native-grass country.

The total area under plough for 1910 s.how= no increase as compared with 1000 in Iho relation it bears to the total area of land occupied, and it is interesting to 110(0 thai, notwithstanding the largo increase of about 400,000 acres in use for agricultural purposes, the exports under that heading, during the period under review, show-« substantial decline, indicating, presumably, that tho wholo of the produce from this extensive area is reoniml to satisfy the increased demands of home consiimpl ion. PitoDi:CTrox. As ■giving some concrete idea of the increase in _ productivity between the two periods, it may bo mentioned that for the years 1909-10-11 the average earning power of agricultural and pastoral land, as shown by the exports, wns-a little over Ss. M. per acre, against slightly under ss. 7d. for the years H)0O-l-2. If, however, a comparison on a population basis is drawn between the average value of the total exports for the two periods, it will be found that the value fell from about ,£l7-2s. to about '.£l6 13s. per head, evidence that tho additional 2.50,01X1 people have consumed "more than they have produced, but it must not be forgotten that in both instances the figures given for 1300-10-11 represent tho actual qualities exported taken at tho values realised for tho same description of goods during the earlier period, this being done so as to show the actual measure of productivity. AVith a view of .showing the effect'of applying tho "levcHing-down" -process it will bo of interest hero to note that instead of only .£lO, in?, the actual yoke per head for the year 1910 exceeded .£22. Closer Settlement. It, will probably be claimed that in addition to the factors already dealt with the closer settlement of tho land is entitled to be credited with .sumo share in the increase of agricultural and pastern' productivity, and it will, therefore, bo as well to give such data as is available, to permit, as far as possible, of tho full measure of credit being deduced, and this may best bo done by showing the difference in the number of holdings of various sizes as between tho two periods, but in doing so it is proposed to omit all holdings under 11 acres (the increase in which is about 10,000 acres). In order (hat the com. narison may be more readily grasped the holdings have been classified into four groups', ranging respectively from 11 to ;)20, 321 to 1000'. 1001 to 20,000 acres, and those over 20,000.

The first group shows nn increase in the number cf holdings of -1538, being at i'ho rate of about 1H per cent., with on increase in total area of about 641,000 acres,- being 17 per cent; The second group show? an increase in the number of holdings of 3542, being 4G per cent., with an increased area of about 2,100,000 acres, or -IS per cent. The third group shows the holdings as having increased by 2143, cental to. 02 per cent., with nn increase in area of about 5,100,00(1 acres, or, say, 44 per cut- , , , , i The next and last group shows a decrease cf 38 in the number of holdings, eotial to about 14 per cent., and a increU in total area of about 011,000 being about 17 per cent. From 'be above it will be seen that tVro" is a total increase in the number of holdings in the first three groups of a little over 10,300, and of this (otal there "are approximately 8400 holdings, file respective, areas of which do not. exceed KiOII acres, and of these 4.100 holding? are wider 321 acres. Summary. The following summary will show at a ■dance the results arrived at by I no present investigation of this country s pro--ress i'o'-.a period covering the ias! ten year* as relating to the productivity, population, and indebtedness.-— Increase. Per cent, tiros? debt— I'ublic ...,f31,15fi,877 Municipal 7,580,000 ,£30,300,877 say (ill; Annual expenditure— Public ... X 1,400,000 Municipal 1,850,000 ' i;f1,250,000 „ 91J Population 231,101 „ 30 Area of land occupied (in acres) .),3IG,.'JiM ~ l«i Average annual productivity as shown by total exports ,3,582,121 „ 27 Average annual productivity of agricultural and pastoral land as shown by 'exports .£2,003,719 .. 30 Average annual productivity of agricultural and 'pastoral laud as shown by exports (per acre) •••• ••••■• a -j<'- » 12:, 'Average annual productivity as siioivn by total"exports (per head of population) Decrease. Bs. 3d, „ 2! From the above, it will lie seon_lh.it the pre-cnt annual internal expenditure, for administration and maintenance of public services is approximated more than it was ten years ago, a. sum nearly equal to the actual average annual in-c--ea=o in the value of the exports, and nearly double the average value, without allowing for the increase that has taken plf.ee iif prices; or, putting it another war, supposing there, bo no further incrcaso iu thn quantit-f of produce availably for export, with a return to values ruling tea

years ago, the increase in exports would lie 1ju(: .little more tlmn one-half ihe increase in tin 1 cost of administration, etc.. assuming a continuation of tho present hvel of expenditure.

In addition to the figures given above is a sum of monev previously referred to of over .£'5,000,(0), which has, durin;.; Hie period under review, been expended under the Public Works Fund, but out of revenue, not loans. There is also an asset, concerning which no mention has jet been made, consisting of the increase in tho number of live sloclc within the country, the value of which might be safely c.-ti-mated at not less than .£0,000,000, and as a substantial proportion of this is represented by the increase in cattle and pigs, it is not improbable that the increase in live slock is largely due to the combination of dairying and the policy of closer settlement, and in connection with the latter ii will doubtless be generally admitted flint the .policy has been persistently pursued, and the figures cited may bo taken as evidence in confirmation of this, though {he exact measure of effect it has had as a factor in increasing the quantity of products available for export must bo lest to individual opinion to decide.

1900/1/2. 1909,10/11. Articles Average Average Average Average . Actual nf Fvnori Quantity. Value. Value. Quantity. Value. SSS :::•::::::: 'K S "SIS S iffiS ttm ' v 40 71". 43 3V2 152.52D 16*,«2 204,221 . .tS,454,37l. JJ12.01S.005 -£15,i25,34S Grain, etc., tons 282,561 JWTD 562,461 302,814 60S.507 : .£9,707,050 .£12,611,309 JJ1G.033.S55 «■»■£» :;:;: S S 25. S K 1SS 3S S3r<SS if Loal. tons : 354.172 507..'<:i7 .i0i.,TI/ &>ynd™5 . gy ' m 178,788 178.7RS Gold ";;',;;'.; - .'.".'.'.'.'.".".!'.r.'... l^' 037 i ' 90<Wi15 1 ' 9 " G ' 6lii jj'l3,0S1.432 .El6,603,553 X'20,065.,404