A Financial Letter.

Manawatu Standard, Volume XI, Issue 1681, 10 April 1886, Page 2

A Financial Letter.

(Snecial Correspondent N.Z. Times.) London, Feb. 25.

In my last letter to you I stated, ia effect, that a property tax of £d m the- £ would not interfere with the flow of capital to the Colony, and did not press with undue severity on the small holder* of property. This opinion I adhere to. If the tax were increased to one penny,, there would be much grumbling and opposition. The tax would be onerous, but no great harm would be done, but if it were raised to above that rate— that is one penny on present valuations— th» value of all property would be lowered ruinously, and you might surely calculate on large withdrawals of money now invested with you. There would also be> a partial cessation m the Qovr of capital to New Zealand. What, then, is to btt done? The 'times are bad m your Colony, as they also are ia many other important countries, but, from excessiT* i borrowing, they are worse m New Zealand. You have been too eager to borrow, and the British investor has been too eacer to lend. Both are culpable, but the latter believed that to pay the interest, etc., you would tax yourselves to the last farthing rather than become defaulters. The bondholder forgets that it is the last straw that breaks the earners back. A falling revenue, sinking funds robbed, and increasing expenditure, donot make the future of your colony look: very cheerful. Your readers, I hope,, will. pardon me for. speaking m such plain language, but I hear and see a great deal, and I think it my duty as a>. colonist to do a little plain-speaking otk this occasion. I am not the only one* engaged m this uncongenial task, though there are many who believe what I say, yet, from interested motives or want of courage, they jwill not speak out plainly. I regret this, as it gives people reason to say they are wanting m patriotism and utterly indifferent to the future welfare) of the Colony. When residents m New Zealand begin publicly to talk about repudiation, then the financial situation with you looks critical ; and when the conversation of one of these residents appears, and js commented on by Mr Froude m 'his " Oceana," which will have a world-wide circulation, many people may think that your financial condition is more than critical— it is desperate. Tie Auckland gentleman (Mr Froude's informant) m speaking of the interest of your debt : II It was impossible for them/he said, to pay by taxation the interest on the debt an it stood." •• They would pay as long as they could borrow." Froude replied by saying, M Repudiation would have serious consequences." But, says Mr Froude, "he seemed to think that to cease to borrow and to repudiate would go together." It may be, the gentleman whose words I have just quoted felt justified m giving utterance to them, from knowing that a great loan of eight or ten millions was impending, which certainly would be likely to bring about the result he predicted. However that may be, the condition of the colony is serious ; but not so serious as to. justify repudiation proposals. I think it will be generally admitted that the taxation of the Colony is onerous, and its resources are heavily mortgaged; but the extravagant cost of its Government, and the heavy quarterlyand half-yearly drain for interest ana£ other charges of the colonial debt, are* weights that weigh down its elasticity,, diminish its productive powers, absorb its accumulated capital, and causer anxiety m the mind of every honest colowho troubles himself about the present and future of New Zealand. |Tobe Continued.]