THE COLONIAL DEBT.

Hawke's Bay Times, Volume II, Issue 109, 24 April 1863, Page 3

THE COLONIAL DEBT.

[From the (Canterbury) Press, 7th April]. Can any one tell us how much New Zealand owes at the present moment ? We could not ourselves, without considerable trouble and tedious reference to past records, make up the correct total; but it requires only a general acquaintance with the history of the Colony to arrive at a result not very wide of the truth. First, then, the General Government borrowed £500,000 in 1857 : a loan of 150,000 was taken up for war purposes in 1860 or 1861 : and last session a further loan of half a million was sanctioned. There are, besides, some little liabilities in the form of Treasury Bills to be taken into account. Auckland has several small loans outstanding both on account of the Provincial Government, and of the City and Harbor authorities. She has now cast aside the petty schemes of former years, and goes in for half a million. Taranaki has been prudent, whether from compulsion or choice we need not enquire, but we believe she has no debt except nominal ones to the general chest. Hawke’s Bay is hardly out of its teens yet; no doubt it will make up for lost time some day. Wellington has not borrowed largely. We do not know the exact amount of the debt, but shall put it down at about £50,000. Kelson owes but little, and Marlborough goes in for duplicity of Superintendents instead of loans. Canterbury boldly loading the van is in for £700,000, Otago for something over £550,000, and Southland for 150,000. It will bo no exaggeration to say that the Colony of New Zealand has borrowed, or is in the act of borrowing, or has determined to borrow, Three Millions and a Half of money. The debt of the Northern States of America must be about £200,000,000, or at the rate of about £lO a head of the population. The debt of Great Britain is about £800,000,000, or at the rate of about £lO a head of the population. The debt of New Zealand is about £3,500,000 or—supposing the population to bo about 150,000, which is not very far wrong—at the rate of £35 a head of the population. So tliat at the present moment the New Zealand National Debt is nearly 30 per cent, greater in proportion to the population than the National Debt of Great Britain. This is a somewhat startling statement. Of course there are many circumstances in which the comparison does not hold good, which we shall refer to. But the fact that our debt has already reached the enormous sum of Three Millions and a Half, is one which we undertake to say will come upon the majority of our readers as a revelation for which they were not by any means prepared. It will be said in the first place, that the population is rapidly increasing whilst the debt will bo stationary, and will be very small in proportion

to the wealth of the country. But we should be glad to know by what authority we monopolize to ourselves the right to borrowing in one generation only. If our theory of borrowing bo correct, why should not the next financial generation “ better the, instruction.”

Again it will be said, we are borrowing on the security of our waste lands. A country like England borrows upon the taxable capability of the country, but we have the enormous public estate of the waste lands to fall back on. Is this true ? Are we borrowing on the security of the waste lands ? We borrow when we have so many acres of waste lands to sell; wo sell them, and spend the money, not in liquidating the debt, but in other matter. How can it be said we borrow on the security of the waste lands when we make away with the security without paying the debt ? Lastly it will be said we borrow for remunerative objects. Ah! that is indeed the whole question. America is borrowing solely for the purpose of destruction. Every dollar’s worth is simply destroyed, and produces nothing. So it was with the English debt. The money was poured out like water on foreign armies, and military and naval expeditions, which left nothing of a pecuniary or economical result behind them. The debt was left, but not one penny of income to meet the interest on the debt. That had and has all to be raised anually out of the people by taxation. Now' perhaps our readers will appreciate what we have always been so strongly urging as to the extreme folly of borrowing for purposes which are not remunerative. The English railways have cost three hundred and fifty millions : a sura equal to nearly half the additional debt has been raised over again in twenty-five years, and invested in railways. Has this pressed on the energies of the country ? Not a morsel. On the contrary, it has extended our resources. Why ? because the railways pay. They do not indeed pay as good an income as they might have done under a better system ; but they do pay interest on capital, even now, on the whole. Let us apply this to our own case, If this enormous debt which we have incurred be expended so as to provide and create the interest, and sinking fund which shall secure its extinction, well and good. It is quite impossible to borrow too much under such conditions. But if not, if this money be wasted as there is always to much temptation to waste borrowed money, it will constitute a burden which will weigh like a millstone on the neck of the colony. The day will come when the interest must be paid by taxes. And remember that a great part of this debt already incurred has been for that for which we shall never see any return. The first half-million loan was raised to pay off the old New Zealand Company’s debt, and the debts of the first war. The £150,000 loan was wholly for war purposes. Out of the Provincial Loans how many will provide their own interest.

It is a very serious question ; and it is a still more serious question now that Sir George Grey lias elected to treat the instructions of the Colonial Office with the same unmitigated contempt which distinguished his career at the Cape, and to sanction every loan raised by a Province, in spite of the direct and positive instructions of the Colonial Office to disallow it.