THE GLOBE. FRIDAY, JULY 30. 1880.

Globe, Volume XXII, Issue 2007, 30 July 1880, Page 2

THE GLOBE. FRIDAY, JULY 30. 1880.

New Zealand is not tbo only country that is finding out that a reckless expenditure on public works has its after inconveniences. One of the oldest monarchies in Europe is also suffering from a fit of indigestion caused by a surfeit of borrowed money, under circumstances peculiarly similar to those at present existing in this colony. The country in question is Portugal. “ It appears,” says the “ London Times/’ “ that Portugal is now favored in the person of Senhor de Barros Gomes, with a Finance Minister, who has the courage to probe sores to the bottom, and the manliness to toll the nation its faults, the dangers of following its recent policy, and the remedies that are imperatively demanded. Ho has presented a scheme of financial reform to the Portuguese Cortes, which is in some respect drastic enough, and in others, perhaps, oppressive in tendency, but the position of the country justifies and demands strong measures. According to Senhor de Barros Gomes, the deficit for the financial year 1878-9 was £1,168,000, while for the current year, 1879-80, ho puts it at no less than £1,555,000, and his estimates for next year, based on existing taxation, gives a further deficit of

£1,112,000. Thus in three years the debt of Portugal would increase by at least £3,800,000, were things allowed to go on as they have been doing. The curse of Portugal would appear to have been a too free spending upon railways and all kinds of public works, some of which are never likely to pay directly, and only to a small extent indirectly. Through such spending her debt has rapidly increased, until the annual charge upon the country for payments upon it now reaches, it would seem, £2,622,000, irrespective of ‘ Treasury charges. The whole revenue of the country is rather under £6,000,00, so that the burden of this debt charge is very heavy.” Seuhor do Barros Gomes, has reviewed the situation, and insists on reforms, and “ points out the dangers that threaten the country if strenuous efforts are not made both to increase the revenue and to restrain all extravagant and wasteful expenditure.” Ho proposes, in addition to existing taxes, an income tax, a modification of the land tax, several now export taxes, and several new import duties. A‘‘ Board of Accounts ”is also proposed to supervise strictly all public accounts and control all expenditure. ‘ The utmost,” continues the “ Times,” “ that Seuhor do Barros Gomes expects from these and similar changes is a gradual establishment of equilibrium, and, to attain even that, a most rigorous check will have to be put upon the disposition to sink largo suras in public works of doubtful utility. There is nothing desperate in the situation, and by making sacrifices Portugal will continue to pay her way, but the sacrifices must bo made and the reforms accomplished, else present embarrassments must increase.” This old monarchy has, like ourselves, learnt from bitter experience the folly of sinking money in unproductive works and keeping a too expensive staff of public servants. But the Government, of which Senhor de Barros Gomes is one, has determined, like the Hall Government, to do its best to place the finances under its control upon a sound basis. The work is no doubt as difficult in Portugal as it is in New Zealand, but a Government with the good of the country at heart is not likely to shrink from such a task, disagreeable and dangerous though it bo. Portugal, with a population of about four and a half millions has run up a debt of about eighty-six millions. New Zealand, with a population of under half a million, has run up a debt of twenty-eight millions, and, moreover, pays a higher rate of interest for its money. But when this is stated all that remains to be said is in favor of the younger country. Its resources are still most undeveloped, it is capable of sustaining an immense increase of population, and it has no disagreeable past to look back to. The financial annals of New Zealand are yet bright and without a stain, and the spirit of the country would refuse to allow them to be tarnished. Portugal practically repudiated in 1852, for by Royal Decree the interest on the debt was reduced to 3 per cent., and such a transaction cannot but have its effect on the morale of the country at large. Still the present situation of the two countries is somewhat similar, and the pluck of the Gomes-Hall parties in grappling with existing difficulties in a spirit of hope and honesty must meet with the sympathies of all except the confirmed log-roller.