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The Evening Star SATURDAY, FEBRUARY 5, 1876.

Nothing appears to us,so imprudent as treating of the financial .affairs of a community by writers imperfectly acquainted with the subjects on which they are descanting. We have seen the evil of this more than once in its effects upon commercial matters at Home, where panics have been induced through comments equally .weak as Mr Ranken’s letter or .the ‘Daily" Times’s * and ‘ Guardian’s’; - articles of this morning. The tendency of flimsies of this class is to produce precisely the evils they profess to guard against. We trust no such result will take place in this instance. It cannot be too strongly impressed upon all engaged in trade, Or who have power to influence it, that to shake confidence in its stability is to bring ruin upon hundreds or thousands who would otherwise have gone on steadily and achieved'ultimate prosperity. There should, therefore, be very good reason for publishing conclusions such as Mr Ranken has arrived at before so suicidal a step -is taken. He himself appears to be a shrewd but somewhat hasty man, who has advanced a little in knowledge of finance, but has not gone far enough to understand tHe present position of! New Zealand. Our opinion of him from his letter is that he : is a clever smatterer-r-superior in many respects 1 to Master Humphrey, butnpt so painstaking. He seems one who has the i stuff in him, but who does not like the ! plod requisite to accuracy.. His method is at fault. He deals with figures as if they were'exponents of the causes that have led to their adverse appearance, and at once he jumps at the conclusion—overtrading. He ex-: amines Bank returns, and . adding large advances to the balance of trade against the Colony, he sums; up his conclusions with ‘‘commercial 1 panic.” He then compares oiir efforts* with those of Victoria and New South Wales, and cries outthatourimmigrants have not produced in proportion to; their numbers: therefore, we are marching backward while those Colo-' nies are moving forward. Perhaps Mr Ranken, in common with some others, will feel surprised that any one should affirm that these appearances, which he considers so' adverse, point precisely to what must have taken place, or no benefit could be said to be derived from our last two years’ labors. He says, very truly, that , for two years the balance of trade has been against us, and that it is impossible our profits can equal the difference; and farther, that as during that time only 300 miles of railway have been opened on the narrow gauge, ‘‘it is im-

puotuuie tney can taKemore than a small portion of these enormous imports. *-' Very true, Mr RANKEN,'but yOu forget ’that railways cost labor .'us V/ell as plant, ; that -during their construction rapn with their wives and families m|isfc live; that a large portion of the imports’ goes , toward . thOir support Shd comfort, and: that ais they are in constructing the means to ward cheap production they will not,]become actual producers until their wort is finished and they have turned their hands to some immediately reproductive employment. .. Precisely the same argu-, ment applies to artizans and others engaged in the construction of buildings for the reception of our large immigrant population. ' They are’ drawn 1 from' the' goldfields and other' industries—even fto,m agriculture—to meet the immediate demand for house accommodation and necessaries. Now, just as additional facilities for production and for disposal of Commodities add to the value of a manufactory, 1 railroads add to; the value of New Zealand as a? property, and ais a valuable security. That this has already been one result is . proved by the high prices of land and bouses wherever the influence of these improvements is felt.' As for estimating the productiveness of our population by the value of exports per head, although under certain circumstances it may be and is a sort of rough test, in our present exceptional position it is * a most unreliable one. At any time it only represents the excess of production over home consumption, and* as, in New Zealand’s case, labor is just how to a large extent employed in creating plant and machinery; for home use, of necessity our comparative expiort power is proportionately, reduced. Neither man nor country can dp two things at once. They cannpt build and cultivate at the same time, with the same hands; The figures that Mr Ranken relies upon as pointing to a commercial crisis show, not that trade is unsound or overdone, but that there is going on a rapid conversion of what is termed “floating capital” into fixed. During its conversion there may be tightness of money, especially if.it goes on more rapidly, than the profits of trade accumulate, for it must either be' withdrawn from trade or obtained elsewhere. But, then, it must be remembered that every line of mlroad and every brick added to a house in course of construction, adds to the value of individual and, through aggregation, national property., We are no poorer our wealth has Only assumed another form. Bankers know this better than most, and need no warnings from the Press respecting their ad vances. 1 There always is a danger of too rapid a withdrawal of capital from trading purposes for fixed investments, but in the present state of the money market at Home there is not much danger of being cramped for means, unless such-specious letters as Mr Rankes cause apprehensions as groundless as they are calculated t6 be burtfull, or some foreign war causes a temporary fright and shuts the national pocket. Unfortunately the bane often goes Home without the antidote. National credit, like a house, is easily pulled down; a baby financier might do it in an hour, but to re-build it requires the labor of able men for years.

Permanent link to this item
Hononga pūmau ki tēnei tūemi

https://paperspast.natlib.govt.nz/newspapers/ESD18760205.2.6

Bibliographic details
Ngā taipitopito pukapuka

Evening Star, Issue 4039, 5 February 1876, Page 2

Word count
Tapeke kupu
976

The Evening Star SATURDAY, FEBRUARY 5, 1876. Evening Star, Issue 4039, 5 February 1876, Page 2

The Evening Star SATURDAY, FEBRUARY 5, 1876. Evening Star, Issue 4039, 5 February 1876, Page 2

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