NEW ZEAL AND AFFAIRES.

Hawke's Bay Times, Volume IV, Issue 184, 22 July 1864, Page 2

NEW ZEAL AND AFFAIRES.

The following extract from the London correspondent of the N. Z .'Advertiser, dated

March 26th, will show the opinion which prevails at4fcme on our financial position. “ Colonial finance still engrosses a large share of attention, and verifies what I stated in my last letter to you. Since then the public works of the Cape Colony have been stopped, they ] having expended’ £IOO,OOO more than they had, or was voted. Sydney exhibits a deficiency of .£900,000 ; and, I am sorry to say, the £200,000 Otago loan is still in the market, and very little of it taken up. The Canterbury £50,000 loan has gone off better, but I understand it is not absorbed. Otago may be inconvenienced, but she has immense resources ; opening up the country, retrenchment, and increased taxation, are her remedies.

■ “People cannot always be borrowing to got out of difficulty; it is a clumsy and a spendthrift’s expedient, and can only end in financial embarrassment. - It has its limit. A man cannot borrow £6,000 on an . state that is. worth only £4,000. I admit in the case of a nation, a colony, or a Province, it is difficult to define, with precision, what amount it ought to borrow; but, as a general rule, works constructed by borrowed capital should be reproductive. Tho money should be reproduced; thus affording means to pay ofl your loans. If you open up the country and attract a population, you sell your land, and increase your revenue; but in New Zealand you appear to be expending vast sums in building towns, and small sums'in encouraging settlement inland. I see by your papers that there are few advocates for the contraction of your immense expenditure (for immenseitis,compared with yourpopulation) ; but there are, in both your General and Provincial Assemblies, a great majority for its expansion ; and your electors look on,* content to enjoy a fleeting and artificial prosperity, until increased taxation, with less means to meet it, opens their eyes to see their true financial position. I am quite sure much that is being done in New Zealand should be executed with surplus revenue, rather than borrowed capital. “ The fact that application has been made to have the Auckland £IOO,OOO loan]quoted on the Stock Exchange, and it being refused, injures the credit, and places your provincial loans at a disadvantage. This, however, does not affect the question as to whether your colony, as a whole, is not borrowing too much, and the of that desire to borrow, and borrow again, which seems to prevail throughout New Zealand, from the largest to the smallest Government. It is far better your colony should take up the question rather than you should continue to ask for loan after loan at your present rate, uutil the capitalist inquires into your financial position and refuses to lend, thereby stopping your money supplies, and perhaps involving you into a monetary panic. Suppose that, in the aggregate, what the whole of your colony has borrowed, and what it proposes or may require to borrow during the next three years, amounts to ten millions sterling (and if your borrowing mania is not arrested, it is likely to amount to that) an annual charge will be entailed on you (reckoning sinking funds) which will amount to about, in round numbers, £600,000, and your customs revenue for the whole of New Zealand is said to be about £700,000 ; and this amount, swelled by artificial expenditure, namely, commissariat, military, and the loan disbursements. It is true you have a revenue from the sale of land, but your saleable land gets less every year, and will in a few years cease, when the payment of interest on, and the principle of your loan will fell on your general revenue raised from fines, fees, licenses, customs, post-office, &c., which forms your general revenue ; and then will be inflicted on you that excessive taxation, direct and indirect, which prevails in England, and to escape which many thousands have gone to our Australian colonies. I know this subject is unpleasant and unpalatable to dilate on, but I trust it may meet with the candid consideration of some of your readers.”