OUR PRESENT POSITION.

Globe, Volume XXII, Issue 2009, 2 August 1880, Page 3

OUR PRESENT POSITION.

TO THB BDITOE 01? THB PEESS.

Sie, —I read with much interest a letter in your issue of 22sd inst. headed " Our Present Position." There are some good and valuable suggestions relative to the colony's financial position in the letter, and with your permission I wish to allude to some questions suggested by the writer, with all respect to his able letter. As regards the suggestion of State aid to industrial and manufacturing associations, I consider the suggestion good in theory, but not otherwise. The writer points out a precedent in England which goes as far back as 1846, and known as Sir Robert Peel's Act, whioh empowered the State to advance public money to land owners for improvements on their lands in Great Britain and Ireland, and further calls attention that a similar proposal is at present the House of Commons to give pecuniary aid to the Irish tenant farmers. Why we are told these things, and also nee them for (he pur*

j!oeo of backing up his suggestions, I am unable to say. I am sensible that we must not, as a young colony, look to the Mother Country for such precedents in this direction for years to come. Our finances and population are insufficient at the present time, which mast be patent to any person versed in the financial affairs of the colony. We ire working our affairs on too much bortdtfed money, and until the borrowing propensities cease I do not expect to see much change for the better. As to the proposal to advance £200,000 to the manufacturing and industrial associations, as suggested, and which may be taken from the deposits of the Savings Banks, it appears to me rather obscure, and I am unablo to see tho feasibility of it. If tho Government lent this large sum of money to the above associations, as an incentive to urge and aid them on, what security would the Government hold for this? Recollect the Savings Bank deposits are liable to be withdrawn at any time, and the Government are directly liable for the immediate payment of deposits entrusted to them by the public ; and if such a large sum of depositors' money were lent as suggested, how could the Government deal as to how long they could lend for ? Tho time would have to extend over a period of years, and I thick the question is an important one whether they could deal with depositors' money in such a way. With reference to tho companies boing made co-operative and the workpeople required to work, fifty-four hours a week, I think this requires consideration. lam under the impression that the workpeople would not submit to such a proposal. So far as my experience of the working population in New Zealand, I think it remarkably independent, and would stand by the eight hours' system, and more so in the face of the small inducement proposed that such companies would extend to them. I quite admit that the eight hours' system should be abolished altogether and nine hours substituted, but it will be difficult to get out of the groove of the eight hours' system.

As to the statement that there is no incentive among the people in New Zealand to start new industries as there is no accumulated capital seeking employment, I must disagree with tho writer on this point. From my knowledge of the different towns in New Zealand I have found there is too much of incentive ideas among men to start new industries, but they usually come to nothing. Why ? Because they cannot compete with foreign industries, and, further, the public here will not support aDy now industry, and I think it premature for a young colony like this to try and cope with much older countries. Again, capital must be bad to support new industries, yet the public will not come forward and supply this, for the simple reason it cannot afford to do so. We havo passed through two years of severe depression, and though we notice business slowly recovering, yet there is not to be found sufficient circulating capital in New Zealand to foster and encourage local industries such as the writer proposes. Money is no doubt abundant according to the last Bank returns published in your paper, but it appears to he looked up in the Banks. This is a bad feature for business, and does not in any way improve the aspect of commercial progress. Interest charged by Banks is high, viz , 10 per cent., and for discounting bills the charge is 8 per cent. In the face of there being a plethora of money in the Backs in New Zealand, rates of interest and discount are not reduced, and which must he a matter of surprise to many. This again is a bar to improvement in business circles. I am quite at a loss to understand why the Government should be expected to give State aid to local manufactures and industries, when the public will not continue to support suoh that are now existing here. We have instances nearly every week or month where the foreign made article is preferred for durability and cheapness in preference to the colonial made articles, and I venture to say this will continue for many years to come. Why ? Because the colonies are unable to cope with foreign oountries in manufactured goods, not only in price but in quality and quantity. We may hear of a few instances but rarely few, with very little to boast of.

When protection shows its face in New Zealand all I can say is God help us. We have an example of the effects of protection not far off, pointing to Victoria, and many can truly say—" Had it not been for the strictly protective policy there, Victoria would have stood first in the list of prosperous colonies this 'side of the globe. Now it stands far from this—caused by its clamourous protectionists. I may have occasion to write further about Protection versus Free Trade, and will reserve my arguments for the present. Yours, &c, Fbektbadbe. July 24th, 1880.