THE FINANCIAL STATEMENT.

Nelson Evening Mail, Volume XI, Issue 176, 17 July 1876, Page 2

THE FINANCIAL STATEMENT.

No. 111. [communicated.]

We would beg the earnest attention of any business men who may read this article to the following illustration of the mode in which tbe public accounts are kept, and ask them if they consider it either correct or businesslike. We have lying before us the accounts for the year ending June 30th, 1875, as printed with Major Atkinson'g Financial Stnteinent of last year. At p. 15, Tahls B, under the heading " Immigration and Public Works Loans, 1870-4," there appears on the credit side the following item: —

" Balance on 30th June, cash iu the 'public account, J2.126.572 18< 2d "

In the New Zealand Gazette for 1875, p. 690, in the published acco-mts for the quarter ending September 25, 1875, there appears ou the Dr side the fo 1 lowing item: —

«• Balance on 30th June, 1875, cash in the public Account, £1076,572 18« 2d." with a foot note appended to this effect:—

" The balance, as shown in the accounts published for the quarter ending June 30th, 1875, has been reduced by a sum of £1.050,000 carried to Bills Payable Account, to meet payment of drafts on the CiOwn Agents, London."

We refer to the New Zraland Gazette containing the nceounts for the quarter ending June 30th (A^ Z. Gazette, p.p. 544-551), arid find not a word about this sum of over a million, and no account headed "Bills Payable Accountl" The balance to credit of Public Works Loan is then given as in the year's accounts, viz., £2,126,572 18s 2d. Moreover, on the debit side there is no account of any sum tquivalent to £1,050,000 having been received from the sale of drafts on the Crown Agents.

Now we want to kuow how this money was spent, when it was received, what became of it, and why tha payment was not entered in due course on the rredit side of the account.

A year ago we should have been ashamed to bore the readers of a New Zealand newspjper with any questions about such a trifle as a million sterling, but now that millions are not quite so plentiful perhaps this little mitter may receive some attention.

Tiie Premier must, we Bhould think, h<ive imagined tliat every copy of the New Zealand Gazette for list year, aud of M- jor Atkinson's Financial Statement had disappeared Irom tlie face of the earth, or even he cou'd n t have had the audacity to make rome of the assertions he his mide. For exnmple, at p. 3, speaking of the Public Wo'ks Account, he saya, " The receipts consist of Proceeds of sales of debentures in London, being the balance receivable on account of the Four Million Loan £1,387,884 Now, if we turn to the oft quoted New Zealand Gazette containing the quarterly accounts we find, under this same Public Works Account, the following items:— Quarter ending September a5, Sales of Debentures £1,1 65 o^7 December 25, dif.o ditto £292 705 March 31, 1876 ditto ditto £117^639 £1,676,431 Only a slight difference of two hundred and eighty-s i *ven thousand, five hundred and forty seven pounds! Still, trivial as the amount is, one would like to know what became of it. Again, at p. 4, the Premier glyes a table showing the actu*l expenditure during the past year of the Pubic Works Account, together with tho estimated expenditure. Among other items is the one of railways. The actual expenditure is put down aa*. £1,620,325 ; the estimated expenditure as ■£?.342,398 10s 61 Major Atkinson at p. IS of his Statement estimates the expenditure on railways at £767,400 Then, again, in the sunie table the actual expenditure on Public Buildings is put down as £67,767 12s 9d, and the estimated expenditure as £112,656, Major Atkinson's estimate is £75,779 10s 9 1. (P. 18.) Thero are several other discrepancies'. Again, Major Atkin-on puts down the I total expenditure of the i>efence L",an for the year at £65,000 (aee his Statement p. 18, and Estimatts p. 80), Sir Julius Vogel states that the sum of £165,336 17s 9d bas been spent, requiring, of courge, additional drafts on Lindon.

Undi r this headiog the Premier gives us a side-glimpse of what our debentures are worth ju»t now in tha London market, with the Bank of Fnglaud rate of discount at 2 per cent. He says that £250,000 of bonds (at 5 per cent ) have been sent home for sale, upon which drafts for £130,000 have been drawr. Ho then goes on to say .—« I am unable to state exactly the net amount of the proceeds.

Probably, after deduct'ng the amount drawn against tho debentures, and allowing for the discounts, there will remain about i'90,000." Now £135,000 deducted from £250,000, leave £1 15,080, so that we shall receive £225,000 for our £250,000 at 5 per cent. And Three per cent. Consols were at 95. In other words our Five per rents are worth 90, and the Three per Cent. Cons-da 95.

One more example and we have done. At p 60 Sir Julius says :— «« My colleague's anticipations as to the liabilities of 1874-5 have provel nrarly correct, there being an excess of £1,700 only." His colleague's " anticipations" are stated at p. 12 of his Statement to be £55,96s 4s. Id. They may have been correct, but if bo the accounts in the New Zealand Gazette must be remarkably erroneous, for they give the actual payments on account of « Liabilities of 1874-5" as follows for the several quarters ending— £ s. d. September 25th, 1875 ... 188,751 5 10 December 25th, 1875 ... 137,160 4 10 March 3lst, 1576 ... 12,U5 19 0 £335,029 9 7 Major Atkinson's estimate 56.98 4 4 1 £279,043 5 7

We should only weary our reader?, as we fear we have done already, if we were togive more examples of the astounding mistakes in the Financial Statement. The questions are, however, of so much importance, that no apology is due for cjlling the attention of the readers of this paper to them. If the public will not be»tir themselves and take some interest in the way the money goes, we shall be in a state of absolute bankruptcy very shortly —even if we are not so now. These extraordinary errors look very queer ; they may be capable of explanation or correction, but we repeat they look very queer. For them the public will hold Sir Julius Vogel responsible ; he may talk of the Government, or the Cabinet, but in reality he is the Government. He may say. as Louis XIV. eaid, " L'etat e'est moi /"' His colleagues are merely his clerks ; and if his policy fails, or bis financial schemes are rejected as unsatisfactory, he will have no one but himself to blame, for he has been granted absolute power. Micat inter omnes Julium sidut. vtlut inter iqves Luna* minor es. —•Hor. Carm. lib. 1 xii In writing on this subject we labor under great disadvantages by not having the whole ye»r's accounts before us It is known that in former years there has been unauthorised expenditure to a very large amount; it may be presumed that there has been some this year, but how much cannot be known until the accounts are published. Even then the public will not, for many months, know what the real expenditure has been, for there is a dodge commonly practised by which accounts are held over until the termination of a financial year in which there has been an unusual expenditure, and not presented for payment until the new year hai commenced. This was evidently done last year Lt ?uch a large amount as £335,000 of the liabilities of 1874-5 would not h*ve been paid in 1875-6. The situation is a most serious one. We cannot complete our railroads without another loan, and if they are ever to pay even working expenses (which to judge of what we know of those already opened for traffic is very doubtful) they must be completed. We have never yet met our expenditure without having recourse to foreign capital in eome way or other, and it will be very hard work to begin. When the expenditure on Public Works ceases, the revenue will fall off, and further taxation must he resorted to. We are already ths most heavily indebted and the most highly taxed community on the face of earth, and how much more we can bear is doubtful. To us, with very little alteration, applies the description given by Sydney Smith of the Englishman of 1820— "Taxes upon every article which enters into the mouth or covers the back, or is placed under the foot;— taxes upon everything which it is plewant to see, hear, feel, smell, or taste;— taxes on everything on earth and in the waters under the earth. * * * taxes on the raw material, taxes on every fresh value that is added to it by the industry of man — taxes on thi sauce which pampers man's appetite, and the drug that restores him to health;— on the ermine which decorates the judge.and the rope which hangs the criminal; on the poor man's salt and the rich man's spice— on the brass nails of the coffin, and tho ribbons ot the bride — at bed or board, couchant or levant— we must pay. The schoolboy whips his taxed top, the beardless youth maneges his taxed horse with a taxed bridle, on a taxed road: — and the dyiog Englishman pouring bis medicine which has paid 7 per cent., into a spoon which has paid 15 per cent — flings himself b*»ck upon his chintz bed, which has paid 22 per cent, and expires ia the arms of an apothecary, who has paid a licence of a hundred pounds for the ptivilege of putting him to death. And he is then gathered to his lathers to be taxed ro more." He says, moreover, in word3 very applicable here "the prodigious patronage which the collecting of this splendid revenue will throw into the hands of government, will invest it with so vast an iafluence, and hold out such means and temptations to corruption, as all the virtue and public spirit, even of republicans, will be unable to resist."

The out'ook is gloomy, the more gloomy because public opinion is not yet aroused to condemn the prodigious extravagance and proflighte expenditure of the Government. As long as loans can be bad at any price and no matter at what ruinous rate of interest, there will be numbers of persons hoping for a share of the plunder who will cry out agiinst economy, and echo the parrot cry about developing the resources of the co'ony. We should like some of the^e people to sse what a similar policy has done for Venezuela, a country four or five times the size of New Z aland. It contains about 417,000 square miles, and on tabla-lands at various elevations above the sea level every vegetable production, both of tamper ite and tropical climates, can be cultivated, and every kind of animal for the u:e of man will thrive. It contains the richest gold mines iu the world— alluvial diggings that would rival Ballarat— quartz reefs that never seem to give out, and in which there is not a share to be bought. Copper, lead, silver, coal, besides preciouß gems, are found t»ere. Pearls are so abundant that a friend of the writer, while dredging for a naturalist, collected pearls enough to make a necklace, bracelets, and car-rings worth many thousands of pounds. In its capital, Caraccas, you may have en your table wheaten bread made from flour grown on the table land above, and bananas, sugar coffee, cocoa, oranges, citrons, limes, guavas, every tropical fruit, and all tbe Europaan fiuits, grown in and near the city. The grape, the melon, the cocoa nut, the fig, tho strawberry, the currant, raspberry, gooseberry, app'e and pear, may be all seen fresh on the dinner-table gathered the same day at different heights above the sea level. The finest tobacco in the world is grown there. The climate is delicious and most healthy; its forests produce cedar, ebony, and other hard woods. And yet the country is bankrupt and ruined— its loans are not even quoted on the Stock Exchange. It borrowed, and paid interest while it continue! to barrow, and then when the loans ceaied the interest ceased. It is to be hoped that New Zea'and may not find herself in a similar predicament. But it is certain that, unless a stop is put to this borrowing, bankruptcy ia inevitable. Tha Immigration scheme has totally failed in adding to the productiveness of the colony. Our exports have fallen off, instead of in-

creating, por head of population, and thus the only argument for our lavish expenditure his broken down. Sir Julius Vogel is oppose! to direct taxation be ansa he thinks it would drive awav foreign capital; he may depend on it that capitalists are not so much afraid of direct taxation, which tluy have to bear in every rountry in Europe, as they are of the enormous debt of the colony, «n 1 of the frightful burden ot indirect taxation, which renders everything, including labcr, so dear, and renders their capital unproductive or unprofitable. * No reference to the Government sfeamer. Holloway's Ointment and Piis —Sudden changes ot temperature sorely try all pt rsons subject to rheumatism, sciatica, tic doloreux many maladies scarcely less painful ♦hcuu'h of shorter duration, On the flrst of stiffness or suffering m any muse'e, j dnt or nerve, rec.uree should immediately be had to fotnen-tatt-ns of the seat of the disease wi'h hot brine nnd by subsequent rubbing in this remarkable Ointment, the uneasiness of the I part will be assuaged inflimmation subdued, I and swelling reduced. The Pills simultaneouly I taken will rectify constitutional disturbances and renew the strength. No remedies heretofore discovered hive prove 1 so t elective as the Ointment and Pill for removing gouty rheumatic and scrofulous atticls, which afflh t all ages, and are commonly hereditary. 2131 (For continuation of Newt see fourth page."}