THE PREVAILING MANIA.

Hawke's Bay Times, Volume II, Issue 107, 17 April 1863, Page 3

THE PREVAILING MANIA.

To the Editor of the Hawke's Bay Times. Sir, —Manias appear to occur at irregular iul ervals, the experience, often dearly bought, of each in turn fail to deter the world from entering into and speculating on the next. While some manias are connected with an object desirable in itself, and profitable to those engaged in it, so long as it is followed in moderation ; yet it is perverted iutQ an engine for enriching a lew speculators at the cost of a portion of the community. Of this class was the. railway mania which prevailed in Britain some seventeen years ago. What could be a more legitimate object for industrial enterprise than, such an improvement in the means of transit as the railway system provided? What likelier to pay well for tlie capital invested ? Yet how few of the British railway companies really obtain reasonable dividends at the present day. Over speculation, “ the mania,'” compelled companies whose existing lines would have “ paid well,” to construct branch lines and loop lines, till the country was traversed by a network of iron with as much regularity and system as is shown inside a kainga Maori* or even in the shape and size of the different patches of cultivation attached.

The history of a mania may he briefly to!<l ; an individual, or a number in .concert, venture into a new speculation, or develope some dormant source of wealth; they meet with success, their gains are large, perhaps extraordinarily so ; others follow their example, with some little caution ami forethought at first; gradually the current iucfeases, the crowd imitate or endeavor to imitate their leaders, the article sought acquires a high fictitious value, and for a time everybody concerned appear to be gainers ; meanwhile the shrewdest of the leaders do actually amass wealth, and gradually withdraw from the speculation. The crisis arrives, prices collapse suddenly, and the larger portion of the speculators find themselves poorer than when they commenced, in many cases utter ruin follows the crisis.

But there are manias about other subjects besides railways and tulips. Many a man has by borrowing money improved his circumstances considerably; on the other hand, how many a man has come to grief by overborrowing. A community is sometimes permanently enriched by borrowing; hut like the individual, the community'may be over weighted with the charges for interest. In any case a loan ought to be carefully, judiciously, and economically expended, and that only on objects that will be to some extent reproductive. The colonies in this hemisphere are all keen borrowers ; Victoria borrows for means to construct railways, New South Wales for the same object and also for immigration, &c., &c. New Zealand is not at all behind in the borrowing race. Probably the debts already incurred by the General Government amount to about Ml2 a head on the whole white population, men, women, and children. In addition to tins large sura, nearly all the Provincial Governments have borrowed considerably. When the half-million loan of 1857 was sanctioned and guaranteed by the Home Government, a condition was imposed, that somewhat checked promiscuous borrowing. That condition was a reality under Governor Browne, but it would appear to be a nullity under Governor Grey. Auckland and Otago have gone in for half-a-million each, and Hawke’s Bay ■ modestly follows suit by seeking -£60,000, m addition to her existing burdens. What is this but a borrowing mania. If we examine the assigned causes of the different loans, we shall find that of the “ Sewell loan,” as we may term the half-million raised in 1857, nearly three-fifths was to discharge liabilities steady incurred, or settled .-on ns

* Native village

by the Imperial Government; nine-tenths of the remainder was to purchase territory. This loan was unobjectionable in the main, although the manner iu which it was contracted was at least suspicious. Eor one man to arrange privately the terras of a large loan with a capitalist or a bank is highly objectionable, and cannot be too closely watched or too severely censured. But the loan itself relieved the colony, and the Imperial guarantee saved 4 the colony a large sum yearly in the different rate of interest secured by it. The next great loans owe their existence to the Taranaki disturbances; and whatever difference .of opinion may exist as to the expediency of Governor Browne’s conduct, there can be little doubt that the colony could not pay the expenses without either borrowing or “appropriating the territorial revenue of the Middle Island this course no one appeared to dare to moot. The Canterbury Railway loan belongs to a class almost unobjectionable. A community as numerous and wealthy as the Canterbury folks may venture to expend even a very large sum in the construction of an iron road, with a reasonable prospect of its being a reproductive work. In any case Canterbury lias a very large available territory, and a handsome territorial revenue, which the colonists “ innocently enough treat astheirown/’andnotasthe rightful property of the lords of the soil, as is the theory of some of their leading men. Ofago is now going in for half a million, but Otago has also an immense territory, although somewhat rougher than its Northern neighbour (Canterbury), and the gold now being raised iu the Mataha river and its tributaries may be admitted as a balance in her favor. The Otagans too, with simplicity equal to that of their neighbours, do not apply their territorial revenue to build palaces, or provide horses, carriages, and livery servants, for the Aborigines; but rather appropriate it to the construction of roads and bridges, the maintenance of armed police, and the administering of justice. Can any one deny that Otago Ims at least a show of prudence on her side when going into debt. Turning our eyes Northward, we see the neve Superintendent of Auckland entering energetically into the borrowing race. Auckland being already in debt some i-85,000, (in addition to its share of the geneva! debt,) is the alleged reason why ATiOO.OOO is to be borrowed. The other objects to bo effected by the loan are so similar to those proposed here that we might fancy the Hawke's Bay scheme a miniature copy of the Auckland one, minus the proposal to pay off old debts by the new. Hawke's Bay modestly asks but AOO,OOO, the security she has to offer is a large acreage of territory, nearly all very rough, much of it unavailable mountain and yorge. The avowed objects to bo attained are, first, acquisition of land ; second, improvement of the country. Were there any prospect. of available land being got, and at a reason able price, no one could object to that part of the programme ; but few will be sanguine enough to believe in the probability of such being the case, when private capitalists openly compete with the government, as is expected'to be the case shortly. If Mr. M’Lean and his subs found it difficult, almost impossible, to purchase at a price that would leave a margin of profit, when they had no competitors, can they be expected to do it now in the teeth of competition ? Put the case plain, suppose the maori run occupied by “ Tuki ” were to beoffered for sale, would “Tonery” or “Makariui” be likeliest to be the purchaser ?■ "Would the long headed speculator doing his own business or the circumlocution office be the quickest and surest at making a safe bargain? The other objects to be attained by the Auckland and Hawke’s Bay loans are the introduction of population and the opening up the country. In plain English, money must be borrowed to improve an estate, although the “ recognised owners ” will neither stand security for the principal, nor pay a fraction of the interest! The colonists who are not ever “ tenants at will” to the estate, must pledge their own “ personal security ” for the money they propose to borrow and expend for the benefit of the landlord ! Can the principle be a sound one ? Yours, A SAXON. Ahuriri, loth April 1863.