THE FINANCIAL POLICY OF THE GOVERNMENT.

Hawke's Bay Times, Volume 16, Issue 806, 21 July 1870, Page 3

THE FINANCIAL POLICY OF THE GOVERNMENT.

("From the Thames Advertiser, Bth July. { We believe it to be good policy for a young community to borrow money to execute public works which will promote the settlement of the countr), and quicken its advance in population and wealth. There is always great temptation to borrow, in the fact that an immediate flush of apparent prosperity is caused, during which there are many opportunities for the sharp to get rich. There are always selhsh interests which gaiu, and each class is apt to think that in the scramble for the division of the spoil, it will outwit other classes. But as it is so easy to get into debt, as debt is so great a burden when contracted, and interest has to be paid, and as it almost amounts to an impossibility to get out of ir, the real bond fide settlers of a colony, as distinguished from the adventurers, ought to watch jealously that no debt is contracted unless it can be clearly seen that the money can be obtained on reasonable terms; that it will be honestly

Spei \% that the amount is strictly proportioned to the actual ami not the fanciful or imaginary wants; that the projects on wliieh the money is to be spent ijyill yield a certain per centage to pay the interest and the principal; and that the condition of the borrower is free from embarrassment. We believe Mr Voxel's scheme is open to objection on all th(S) grounds. We cannot get an Imperial guarantee for the money, and w« should have to pay, at the least, 5J per cent., if we could get the mopey at all, which we believe to be doubtful. But if we had it, can anyone believe that it would be honestly spent ? It is perhaps the greatest evij of such loans thai they throw an immense amount of power into the hands of the government of the day, which, unless the administrators are better men than we have ever seen in New Zealand, or are ever likely to see, is the cause of much misehief. With 2Uch an amount of money to be spent, there would be temptations and facili ties for log-rolling, scheming, jobbery, favoritism, bribery, and wastefulness, which our rulers would be more than human if they could resist. New Zealand would offer a spectacle without

parallel, and the power of the Government would be so great that it could stifle the. voice of the people. Everything would revolve round the Government, who would have it in their power to buy over able men who might le troublesome, and employ every clever schemer who could mauage to bring jufluence enough to bear. For a time the colony would be a paradise for all except the honest hardworking settler who intends to remain here and leave his children as colonists of New Zea Jand. If he had not influence or impu dence or dishonesty, so as to secure a Government job, for him there would remain only the hope that he might be able to pay his" share of the dreadful reckoning when the time came. So strong is the tendency to this state oi affairs, that the number of cases where n)-*ney borrowed has been a real and permanent benefit even to a colony are exceedingly few. We know something about it already. The three million loan was to throughly settle the native question, so that it would cost the country nothing ever aft^'wards: it was to colonise the whole Waikato, and inake it a grand expanse of cultivated fields dotted with smiling homesteads. What has it done ? Their seems a curse in borrowed money. While the spend n, was in fuil whirl, Auckland was raised to a fever, and a town which had not a respectable estate around it in cuiti vation fancied that it was soon to outBtrip Melbourne. And another evil of guch a state of things is, that honest men are deceived by it, and betrayed into entering on speculations which prove ruinous to them. How the- three million loan was wasted we need not tell anyone who watched public affairs at that time, nor how Auckland col lapsed when it was all spent. There ar every many in this community who suffered greatly at that time, and who

are not Jikely to forget the evils of debt. And indeed, we have all good cause to remember it, for we are burdened with the payment of a debt to a heavier extent than perhaps any other people. We need hardly speak of the Auckland half million loan, which was in purpose so very like a small rehearsal of this ten million job. It was to make a railway to the Waikato, by which the overflowing produce of the settlers was to be brought to Auckland harbor, and it was to introduce to the province numbers of the best class of settlers. What was the result ? The railway was a gigantic job. Enormous sums were paid foi the land through which it was to pass,

but never will, ana contracts were given to incompetent men who broke down. The material lay till it rotted, and now kind Naiure is gradually obliterating the marks of our folly; the embankments are falling in, and there will soon be hardly a vestige or remembrance of. the railway scheme,exceptthat we have still to pay the interest on the money borrowed to make it. As for those immigrants who were s,ent out, they cursed the place and their own folly, and although some of them have, by great industry and by stinting themselves to a degree that they would not have had to do at borne, reached a fair position, only a small minority have really settled and existed on the land they were intended to occupy. Our experience of burrowing ought to be a warning.