The Evening Star. FRIDAY, JULY 10 1874

Evening Star, Issue 3551, 10 July 1874, Page 2

The Evening Star. FRIDAY, JULY 10 1874

It is expected the Government will oppose all Provincial borrowing. We do not see how they can consistently do otherwise. Experience has shown that wherever Provinces borrow, on what is termed Provincial security, money has to be paid for either by an extravagant rate of interest, or by heavy premiums. It is not so many years gone by as to be out of memory that Otago, the most prosperous Province of New Zealand, could not float its £IOO debentures at a higher rate than £Bo—that is to say, interest on £IOO was paid annually for the use of £BO, and it was agreed to pay back in capital £IOO for £BO at the end of a specified number of years. The reason was plain enough : Provincial debentures had no standing on the English Stock Exchange. New Zealand was known, but not Otago; and although the geography and form of government of the Colony may be better understood now than at that time, it is not likely that there can be half-a-dozen New Zealand Governments borrowing at the same time in the same market without injury to credit. It was to avoid this coraplicalion that the Consolidation of Loans Bill was passed, which united in one fund the whole of the Provincial liabilities. No doubt

were, the Provincial loans asked for, sanctioned, there would be nice pickings for individuals as there were before. Men of capita], acquainted with the true value of the security of such a Province as Otago, would gladly give £9O, or perhaps more, for its £IOO debentures ; but they would find no favor in the money markets of Europe, in which national securities are subjected to pretty close scrutiny. If, in addition to New Zealand stock, the amount of which already issued and authorised to be thrown on the market is known, the Provinces presented themselves and asked additional advances, there would really be a breach of faith with the monied world : the tendency would be to depreciate the value of Colonial securities and to shake confidence in the integrity of Colonial finance. It is therefore impossible that the Government can accede to such a request on the part of the Provinces. This is the difficulty that the Premier

has, tor yearn past, endeavored to overcome, and in which his efforts have been thwarted by the Legislative Council, He has endeavored to introduce measures for localising expenditure on what may be termed subsidiary public works. He first pioposed a plan by which the owners of property in a district requiring branch railways were to be held responsible for the difference between the net revenue of the lines and the interest payable upon the money invested in them. Nothing could be more reasonable. In all probability very few districts would have had to advance a farthing after the first year : certainly none, when due care had been observed, would have had to tax themselves nearly so heavily as they pay now for maintenance of very inferior and almost impassable roads. Yet the prospect of expending sixpence in the pound on the rental of their estates, in an invest-

ment that would render them five or six times as valuable, terrified the oligarchy in the Legislative Council, and they would not consent to it. Last session he proposed to enable Provinces to borrow on the special security of the works themselves—just as men do every day when money is required for investment in reproductive undertakings. There was nothing startling in the proposition. It is done all over the civilized world in the construction of docks, railways, ships, canals, bridges and roads. But noeven that would not do for the oligarchy : it was too business-like a system for them—they would have nothing to do with it themselves, nor allow anyone else to have the powers. The only conclusion that can be arrived at is that they will allow nothing to be done for the improvement of their property, unless it is paid for by the public, at whose expense they will have no objection to become rich. There would not be much to be surprised at if the proposition suggested by Sir F. D. Bell were gravely put—that pastoral land should be sold for the construction of local public works at 10s an acre, the interest of which, at five per cent.—a high price for money at Home—would be 6d per annum. And since, with very little outlay, most of the land could be so improved as to feed two or three sheep an acre, the saving in assessment would be a vexy nice pi'ofit. It is time we wei'e awakened to the true value of the estate rapidly passing out of the hands of the public, and of the best way of dealing with it for public benefit.