The Evening Star SATURDAY, NOVEMBER 5, 1870.

Evening Star, Volume VIII, Issue 2370, 5 November 1870, Page 2

The Evening Star SATURDAY, NOVEMBER 5, 1870.

Thh last advices from Horae were calculated to surprise many of our Colonial financiers, who were not prepared for the announcement that the Bank of England rate of interest had fallen to 2h per cent. This is a fact totally at variance with the theories laid down by many who jumped at the conclusion that, in consequence of the war, money would rise so much in value as to he unattainable. It is quite within the range of possibility that loans might be difficult to negotiate, notwithstanding the low rate of interest; but it much

depends upon the state of public opinion at Home as to the prospect of England being involved in war, whether or not money can be obtained for reproductive investment in the Colonies. Although the troubles in Europe have for the moment checked improve ment throughout the world, because of the uncertainty that has been introduced into every calculation, this state of perplexity cannot last long, Even capitalists cannot live on air, and will not be content to see the principal wasting, when the interest ought to provide income for the supply of daily wants. The low rate of interest points to large amounts lying idle : the natural consequence of check to trade, and withdrawal from investments in foreign stock. If therefore England can keep out of these complications, the Colonies will be turned to as offering the best field for the investment of surplus capital, so long as it is laid out on works of utility. A great amount of trash is written by the opponents of the Fox Ministry against loans, and the laying additional burdens of taxation on men's shoulders. These sweeping condemnations of borrowing are the consequence of a habit for political purposes of muddling all national loans into one indiscriminate class. No pains are taken to divide the loans into classes according to the uses to which they are applied. A loan for the prosecution of a Maori war is placed side by side with one for the construction of a railway. But between these two there is a wide difference. The one is a perpetual burdeh without anything to shew for it. Many people seem to think because certain artisans or certain classes of men are more than usually busily employed during war, that it is not, after all, such a very bad thing for a country. They point out that Sheffield, Birmingham, and other arm manufacturing populations, may now bo actively employed ; but that is looking only at the quasi fair side of the picture. Supposing even the arms constructed arc not needed, they are so much capital withdrawn from use. They are not even instruments of production ; and if ever brought into operation, are not means of benefit, but of destruction. And, on the other hand, the large masses of operatives engaged in the woollen and cotton factories will for some time be either idle or partially at work ; so that more is lost in one way than is gained in the other. So between war and railway construction the difference is immeasurable. So far from railways in the Colony adding to the weight of taxation, like the three million loan, they tend to relieve it. They are a gain to the country in the course of their construction, for they employ a great number of hands profitably. They are a blessing to a country when formed, because they diffuse comfort, cheapen necessaries, bring land into profitable occupation that would otherwise be a wilderness, and extend civilisation. While money wasted in war, returns nothing annually, but is a constant drain upon the revenue to pay the interest, railways become to a certain extent self-sustaining as soon as they are capable of being worked. The first year or two’s experience may not realise the interest on the amount laid out; but every month developes traffic, and a country like New Zealand becomes almost independent of season for communication with the interior. Assured then of the safety of the investment, we believe that money would be obtainable lor the works projected by the Government, Taking into consideration the manifest advantages derivable from such works, and the moral certainty that they will not lay one fraction additional taxation upon the people that will not be repaid a hundred-fold by the direct and indirect profits derivable from them, we cannot help feeling surprised that they have not been more energetically pushed by our Provincial Government. We understand proposals for the construction of the Clutha Railway from more than one party have been received by them. We should be glad to think that there was a probability of their receiving that businesslike and prompt consideration they deserve. But by their works men are known ; and experience does not justify us in the expectation that they will be dealt with in a thorough business spirit. The ill-directed efforts and blind bargain of the Executive, to obtain tenders for the Clutha line, and in the contract for the Port Chalmers Railway; the want of energy and indifference displayed by them, lead to a doubt whether proposals, however advantageous, will be accepted. Perhaps in another fit of desperation the Province may be treated to the construction of another line of railway, deliverable subject to approval at such a date, and people will have to fold their hands and bide their time, and wonder what sort of a thing it will be.