OUR PRESENT POSITION.

Globe, Volume XXII, Issue 2000, 22 July 1880, Page 4

OUR PRESENT POSITION.

TO THU EDITOS OF THK PEE 33. Bib, —The difficulty the colony will find after the balance of the loan is spent, in meeting the interest on its liabilities to outoide creditors, and the necessity of taking practical steps to relievo the people from the present heavy taxation, nro all important questions which require earnest consideration. Parliament is wasting time and money in squabbling over the mismanagement of the past —thot expensive past —the cost of which the taxpayers of the hour are called upon to defray. Members, whether they be of this, that, or the other party, are absolutely fighting over the names of the taxes which it is admitted must bo imposed, and are bickering over factions contests for place or power, instead of setting themselves seriously to work to remove the necessity of suoh heavy taxation, which can only be done by an economic administration, and by taking steps to increase and multiply the earning ;;ower of the community. I hold that it is of but little moment to the country at large whether taxes are raised by a property or income tax. In any case, exees«ive taxation injures the country, os it reduces the ability of the people to bear the taxes. The interest on our national debt osnnot be reduced, and the staggering fact stares us in the face that it absolutely requires about a fourth of our gross exports 10 meet that annual interest, which reaches in round number £1,500,000, while our exports only amount to some £6,000,000 a year. In other words, taking wool as worth Is per lb., wheat at 4s per bushel, and gold at £4 par ounce, onr wool contributes 3d per lb., our wheat Is for every bushel exported, and our gold £1 for each ounce raised, to provide for said interest. In addition to the national indebtedness there is the interest payable to absentee mortgagees, the profits earned jjby English proprietary financial institutions, and all descriptions of interest payable to non-residents in Now Zealand —the total of which is usually estimated at another £1,500,000 —to bo provided for. Thus wo have to give half of our wool, half of the wheat wo ship, and half of the -gold we raise, and half of every article we export to pay interest on borrowed money , leaving only some £3,000,000 to provide for the cost of our imports. Under these circumstances the question as to whether the country should be taxed through a property -or income tax sinks into insignificance. Looking over the prospects which the immediate future appears to present, I cannot but strongly feel that the question of developing local industries, has not received that attention which its large importance demands. In a young country like New Zealand, with only a population of say 450,000 people, and its resources partially crippled through the reaction consequent upon an undue impetus having been given by the expenditure of a large sum of money on public works, which -public works cannot be immediately remunerative, it is next to impossible for private individuals to develope unaided the many industries which, if successfully commenced, wonld prove a source of profit to the country. Although we grow much raw material, our manufactories are limited in extent, and the townspeople are living upon the labors of the country people. To obviate this I suggest that State aid should be given to industrial and manufacturing associations in the direction of supplying such associations with capital at a moderate rate of interest. Advances made by the State are not unknown in Great Britain, (as by Sir Robert Peel’s Aot of 1846 authority was given to advance public money to landowners for the improvement of land in Great Britain and Ireland), and at the present timo a proposal is before the House of Commons to give pecuniary aid to the Irish tenant farmers. As a commencement, if say £200,000 ware lent to manufacturing or industrial associations to be formed in the four large centres of population —vie., Dunedin, Christchurch, Auckland, and Wellington, or £50,000 to each, at 5 per cent, interest, it would be a form of protection free from the objections generally urged against protection pure and simple, as it would in no way increase the cost of the articles produced to the consumer. This ■money might be taken from the deposits in the Savings Bank, which consist of the savings of the people held in trust by the State j and I cannot see how such savings canid be better employed than in being used os capital to create work for the laboring population. It could be lent on some such basis as the following :—No one company to borrow over £SOOO, and no company to receive over £1 for each 10s of capital paid np by the subscribers, and for every £2 10s of uncalled capital. The interest on the Government loan to be a first charge upon the association, and the debt a preferential claim. The interest to local shareholders should be restricted to 8 per cent., it being understood that the primary object of subscribers was to «id in tha patriotic work of relieving the present heavy* taxation by providing work for an increase to the present population. If such companies were made co-operative, the workpeople should be required to work fiftyfour hours a week at a moderate rate of wage, depending for their additional remuneration upon the share of profits they would obtain from the company if it proved successful. By this means the working people would have a -direct interest in the prosperity of the undertaking. The position, then, would be that a -company using £SOOO at 5 per cent., and £2500 at 8 per cent., would only pay 6 per cent, interest for the permanent capital it employed, -sad with this low rate of interest, and the Impetus that would be given to it through the employes having a direct beneficial interest in its prosperity, it might reasonably be expected that any industry that was so started would be successfully worked. Amongst other causes that have led to the present state of depression is that eight hours have been considered a full day’s work, which, in connection with the disproportionate rate of wages recently ruling and the excessive rate of interest, have almost prohibited any manufacturing industries from being profitably or successfully developed. Few industries, at which men work only eight hours a day, can be successfully carried on here in competition with Europe and old settled countries like America, where much longer hours are the rule, and where, through a variety of circumstances, labor is characteristically different, and our industrial classes must be prepared to recognise these stern facts and bend to the times if they wish -capital to be diverted from agricultural and pastoral pursuits to manufacturing undertakings. In addition to this there is no incentive in New Zealand to start new industries, as there is no accumulated capital seeking employment, as is the case in the countries above enumerated. I do not purpose entering into minnti® as to the exact description of the articles which could be successfully manufactured, or the industries which I think might be commenced here if the proposal I mats were adopted, but I may draw attention to the following largo number of articles and their value which, according to the Customs returns, were imported •in the year 1879, the majority of which, I take it, might be manufactured or produced in New Zealand : Apparel and >'lopa £293,858 Boots and Shoes 171,689 Brnshware and Brooms 15,482 Candles 51,890 Cement and Plaster of Paris ; 57,797 Coals • 231,457 Confectionery 22,574 Cordage ... ... ... ... ... 13,111 Emits, bottled, preserved, and green 71,050 Furniture 91,817 Glass Bottles 8,569 Plate Glass 9,738 Window Glass 15.556 Hats and Capa 52,116 Hops ... ... ... ... ... 11,85° Molt 10,955 Hosiery ... ... ... ... ... 35,015 Jams and Jellies 49,490 Leather 61,904 Nails and Screws 30.128 Oil, castor ... ... 15,504 „ linseed 16,291 Pickles, Oilmen’s Stores 73,678 Paper Bags 7,438 ~ Wrappings 7,256 Pipes, drain 6,259 Printing Paper ... ... ... ... 63,605 Saddlery and Harness 74 631 Grass Seed and Clover 70,922 Starch and 81ue... .. ... ... 9,390 Twine 7,133 Vinegar 8,738 Woollens 137 309 Blankets 36,829 Total £1.861,230 A* will bo seen the above list represents nearly £2,000,000 worth of articles, and if only one-third of this amount was retained in the colony, it would be the moans of finding employment for, and supporting a large number of men and their families, who in turn would help to increase the consuming power of iooal markets for our farmers’ products.

I have sufficient faith in the public spirit of my fellow colonists to believe that if £50,000 were advanced to each of the principal towns in New Zealand £25,000 would bo locally subscribed by the townspeople to enable selfremunerative industries to be permanently established in their midst, and as the country progressed, and further sums of mouey were advanced by the State, tha townspeople in turn would increase their contributions. Our railways, telegraphs, post offices, and other state departments, are constructed on n scale extensive enough to administer to the requirements of double or treble our present population, and some strong effort is necessary to enable the country to support a largo increase to the present limited population, whereby the burden of maintaining these expensive departments would be proportionately reduced, and I see no hope of such an increase to the population being possible unless we become our own manufacturers. These proposals may be doomed Utcpian, as they are out of the common groove, but it will be conceded that the exigencies of the colony are such as to call forth suggestions from anyone bold enough to face adverse criticism. For mjself, I cannot help thinking that if the system of Government assistance to which I have alluded were practically carried out on a largo scale, being of course chocked by duo legal and other restrictions, and subject to the promoters of each, industry giving reasonable data to show the industry promised to be successful, that a great stride would be attained towards the solution of our present difficulties, to say nothing of such work being infinitely more palateablo and beneficial to those now out of employment than sending them at reduced woges to such works as constructing distant railways that are not required. As a further means of enabling the local capital to be readily subscribed., and to carry out the co-operative feature of the proposal, it might be made compulsory that each person employed should hold one or more shares in the undertaking they were engaged on. Were the shares, for instance, £1 each, I have no doubt that in those cages where persons seeking employment bad not the means to provide the subscribed amount, shares would be freely given to those who really needed them, and this would be an infinitely better method of relieving the distressed than by contributing towards the soup kitchen for their support. Tours, &0., Gbo. G. Stbad.