S ATUEDAY, NOVEMBER 14, 1891. The Land Tax

Feilding Star, 14 November 1891, Page 2

S ATUEDAY, NOVEMBER 1 4, 1 89 1 . The Land Tax

-♦ In our last issue we published the opinion of the Ecomomist, one of the recognised financial authorities of the world, on the taxation laws of this colony, andwe now give a resume of an article on the same question in the Melbourne Argus of October 30th. The writer introduces the subject by saying that : — " The statesmanship which consists in taking up local fads without any regard to the outside interests that they may threaten, is always pleasant to the politician and is often temporarily popular. As the individual becomes frequently absorbed in his own interests to the neglect of the hundred-and-one claims that are made upon all members of the community, so the politician who happens to be in power is apt to legislate only for the advantage of his own Government, without considering the innumerable relations which the state has with other countries. A colony, a state, a nation-is but one among the congeries of colonies and states and nations that are extending the civilisation of the world, and is always bound to consider its relations with other countries, and especially with that couutry, upon which its financial business and eominorce most depend. Mere isolated, selfish legislation, which treats a colony as if it were a Robinson Crusoe settlement that could afford to flout the rest of the world, is most likely to lead to undesirable consequences. And unfortunately there are two items of news which show at a glance that some of the Australian coloniea are iv danger of retarding their own prosperity by hasty and crude legislation ou financial subjects. The one is that a number of the life insurance societies of Great Britain have determined to refrain for the present from investing in colonial securities ; the other is that private investors who have made advances to New Zealand companies are proposing to withdraw their money. In both instances tb.9 withholding of capital is due, not to any want of confidence in the resources of the colonies, but simply to the legislation which has already been adopted or is now being threatened. The constant tampering with the tenure of land, and the wild demands of tho labour party, have inspired a widespread distrust among the very people who would otherwise have boon willing purchasers of colonial debentures. It is, of course, possible that exaggerated accounts are boiug spread. There are writers, for instance, who seem to accuse New Zealand, which is the first colony to place a tax upon the outside debenture-holder, of repudiation. But Mi- Ballanoe has gone uo further than to enact that New Zealand companies which issue debentures may deduct the income tax from tho interest that they pay iv Melbourne or London if they choose. In actual piactico fow companies will chooso to do anything of tho sort. The interest, as a rule, is payable in London, and, aa the contracts aro executed iv that city, the companies will bo compelled to pay the full rate of interest for which they haye covenanted. Otherwise the law courts will have to determine whether tho New Zealand Parliament can impose a tax upon people who are ousido of its jurisdiction, and who have advanced money on an explicit contract. The result will probably be that tho shareholders in the colony will have to bear tho burden of the taxation, and that fow of the companies will destroy their English business by deducting tlvo income tax. Bat in the meantisno a feeling of uneasiness is created by tho retrospectivo nature of this legislation. Tho companies that have

issued debentures sold them on the understanding that the full amount of the interest would be regularly paid. When Parliament steps in and declares that the amount my be reduced, people begin to ask what will come next, what other stop may be takon, and whether it is worth while to invest in a colony where a sudden whim of the Legislature may render the returns uncertain. If. the New Zealand Government announces plainly that every man who purchases debentures in a New Zealand company is liable to be taxed, then the investor will know exactly what to do. He will either hold aloof altogether, or he will exact a rate of interest that will help to protect him against the tax. Thisis fairenough. Every Government has the right to say that no mortgage shall be recognised unless a portion of the interest derived from it is paid to the state. But no Government has the right to interfere with bargains that have once been made. And when this course is pursued it can hardly be a matter of surprise that the private investors, whose incomes are liable to be taxed, prefer to remove their capital from New Zealand altogether.

We have to acknowledge receipt of a return of the frozen meat trade of New Zealand compiled by Messrs A. S. Paterson and Co, of Dunedin and Wellington, for the year ending Sept. 30th, 1891. The total in lbs of mutton, lamb, and beef exported was 120,084,806, being an increase over the previous year of 38,377,281 lbs. The capacity of the freezing works in the colony is, 3,665,000 sheep, and the mutton exported last year represented 2,001,413 sheep of 60 lbs. The sheep in the colony on 30th April, 1891, numbered 16,749,892, an increase on the previous year of 633,579 notwithstanding the enormous drain for home and foreign markets. The estimated carrying capacity of the vessels engaged in the trade shows a grand total of 2,539,850 of sheep per annum. The charges on the meat from arrival at the freezing works until sale in London is If d per Ib. There are four additional freezing works projected for erection in 1892 in the South Island. These figures indicate the enormous progress made in this trade since its inception only a few years ago.

A wire from Wellington states that the Government intend calling for tenders for the exclusive right of advertising on the back of postage and revenue stamps and telegraphic forms. We would go a few steps further and let the police in town and country be hired out as bell-ringers and bill-stick-ers, while the permanent force could also be hired cut in the larger towns as Sandwich Men. The right to advertise on the backs of these fine fellows would be eagerly bought at a high price. Hansard might also be used as "an advertising medium," either by the insertion of " leaflets " or by interlining the names of the goods advertised in the reports of the alleged speeches made by members. We give these suggestions free, gratis, and for nothing, and hope the Colonial Treasurer will act on and profit by them. " There is money in them."