NEW ZEALAND'S POSITION.

Dominion, Volume 6, Issue 1692, 7 March 1913, Page 4

NEW ZEALAND'S POSITION.

The ; President of the Wellington Chamber of Commerce plainly got out of his depth when under examination by the members of the Trade of Empire Commission on Wednesday afternoon. All went swimmingly until Mr. Mabin began to answer tho questions put to him: by Sir Rider Haggard concerning 1 tho financial position of the Dominion. Then he found himself being led into unexpected difficulties by his skilful examiner, and at last he committed himself to statements and opinions which might reasonably lead 'one to the conclusion that he thought the country to be in a state of insolvency. Tho fact that-Mr. Mabin holds the office of President of the Chamber of Commerce, and was giving e.vidence as such, naturally gave weight to the views lie expressed, and it is just as well therefore that the erroneous impression likely to be created by his statements should' be corrected. Me. Mabin indeed has already set out to do that himself. _ No doubt when he saw in cold print the lengths to which he had been tempted to go under the adroit questioning of members of the Commission, he realised the sweeping and damaging nature of his hasty and ill-consid-ered views, and seized the first opportunity to put himself right.

As a matter of fact, while there may be ground for regarding as unsatisfactory the proportion our'exports boar to our imports, and to the interest charges which the country has to pay annually to our outside creditors, there is no justification for the extreme conclusions drawn therefrom by the President of the Chamber of Commerce.' The interest charges, which seem to have specially impressed this' witness in forming his opinion, represent a charge against capital expenditure which is largely in undertakings calculated to assist directly and indirectly in tho development of the productivity of the country. That expenditure, it may be argued, should ba making itself felt as an influence to swell our exports. ' The contention would be quite sound, and it would bo ( equally correct to state that that influence, is already felt. But the full return is not felt. in most cases for many years after the expenditure takes place. When a settler sinks his capital in the felling of the bush on his back-blocks holding, he does not immediately get the full return on the capital sunk in the work. On tho contrary, it is a matter of years before tho cleared land can be brought to that state of cultivation which enables him to reap the full harvest of uis earlier expenditure. So in a young country like this the capital sunk in developing its natural resources only makes itself felt gradually in the way of increased production and increased exports. It might also be pointed out, as indeed appears to have been done, that the value of the Dominion's exports as quoted each year is only an estimate, and is likely at times to prove very misleading. The question of the financial solvency of the Dominion is not a matter to be decided in the simple fashion adopted by Mr. Mabin. A comparison of the imports and exports may form some guide to the degree of prosperity enjoyed at the 'moment, but there are other and equally important factors to be taken into account when considering the financial stability of the nation. And when these are carefully weighed it will bo seen that New Zealand has no reason to question the present or doubt the future.

We have been among those who for some years past have urged a gradual tapering off of our borrowing policy, and we still hold the view that this would be a wise course to follow. It is desirable that the work of opening up the remaining idle lands of the country l should proceed as rapidly as possible, and to do this money will be required for roads and bridges, and here and there railways. But for a time at least any undertakings at all in the nature of luxuries should be laid aside for future consideration. Perhaps the weakest spot in our national economy is the tendency to private and public extravagance— the disinclination to stint ourselves where our comfort or convenience is concerned. The prosperity of the country and the exuberant optimism of the late Premier, 'Sii! Joseph Waijd, no doubt have been largely responsible for this. It is a matter dossorvingthu attention of lenders of public opinion, not in any alarmist

spirit, but with the cool judgment 01 men who, when confronted with a possible source of danger, wisely take steps to avoid the risk.