SIR JULIUS VOGEL'S LETTER.

Nelson Evening Mail, Volume XVI, Issue 142, 16 June 1881, Page 4

SIR JULIUS VOGEL'S LETTER.

(N.Z. Timei) On the subject of railway administratio?i, Sir Julius advances views which arc less calculated to bring about any practically good results than to present him in las favorite pose of a daring financier. Conceding that (.here is an clement of practicability in the proposal to vest tho administration of the State railways in Ihe hands of Commissioners, absolutely free from political influence and holding full powers to develop the system, as their own judgment and experience suggests, and the moans at their command may penuil, tho proposal to give them power to borrow money for such purposes, apart from and outside of the general financial arrangements of the colony, is radically bad. There is a plausibility and spccioiisncss in the proposal to so manipulate tho public «. accounts that the liability for railways should no longer be deemed a direct part of the public debt, and that it. should be considered purely a liability against the railway system of the colony. Against the railways' revenue, the interest aud sinking fund he proposes should be an annual charge, together with tho charge for fresh loans for railway purposes, all which, as Sir Julius Yogel puts it, " could be made a first claim on railway receipts, with a contingent but thoroughly complete guarantee of the colony in addition," We presume the first charge on railway receipts must always be the working expenses, and any deficit arising after such are paid, no matter what the system of administration, would have to come out of the general revenues of the colony. Sir Julius Yogel tries to gloss over this fact by making profession that with the guarantee proposed the loans will bo Government loans, so far as the security they offer is concerned, but he asserts that " they will not be in that sense which so often damages New Zealand loans — they will not be a direct part of the public debt to be quoted as such." Very shallow reasoning is tins' — a d sperate begging of the question. In what respect or from what causes have New Zealand loans been often damaged? What assurance is there, except his own ipse dint, that capitalists would show a greater readiness to advance money for New Zealand railways under the new dispensation than they do now? Sir Julius advances the opinion that the railway loans placed on a proper footing, "primarily secured on railway receipts indirectly guaranteed by the Government," would be negotiable at 41 p er centi on \nr value, that the railway estate would develop, and in course or time become enormously valuable. Twenty years hence, he says, the railways of New Zealand will be worth more than the whole public and railway debt. Twenty years is a somewhat long stage in a young nations history, and meanwhile watching the gross grow, what would he have the starving steed do ? Our railways as at present developed have, under recent economic administration, been made to pay 31- per cent, on the whole course of construction, but this only meets a portion of the liabilities "What about the sinking fund and the deficiency between 3^ per cent, and the rate of interest, whatever it may be, to be paid for the borrowed capital out of which to construct railways? And again, what about the burdens that would constantly accumulate if hia scheme for constructing certain railways on deferred loans were seriously considered ? Deferred loans in reality means obtaining present accommodation at an excessive rate of discount. He instances transactions in American railways where money has been obtained at 50 per cent, discount and £10 for £100 bonds, with shares thrown in for nothing, aa an inducement to take up bonds, and inferentially suggests that such a system might be adopted here. This indeed would be discounting the future with a vengeance, He assumes that the Government are adverse to the proßecution of the railway system from its present incomplete to a complete condition, but there is no reason for such assumption. Indeed we doubt whether a score of men in all New Zealand, knowing aught of public affairs, harbor such a thought Ihe Government have been censured by those interested in the construction of certain proposed or partly constructed lines, for not pushing on the work, and these persons seldom cease irom importuning, but the general opinion held is that the present cuutiousness displayed is well advised, and any departure from the decision not to float another loan for three years would be injudicious and unpopular. Little faith can be placed in the figures adduced by fcir Julias Yogel in support of his theory that railways should be made at any cost of financing. He instances, fluctuations, followed by large increases, in the value of American railway securities to show how successfully they have passed through the shoals of difficult finance, and asks "what has New Zealand known of such difficulties ? The reply is, the circumstances of New Zealand and America are bo widely different that one fule and basis of calculation will not apply. America has millions upon millions of acres of land easily made productive, continuous streams of population flow in irom countries of the old world, the cost of railway construction is infinitesimal compared to the cost in .New Zealand. Population and settle ment in America keeps even stride with the railway pioneers. Here it can only follow in leisurely fashion after expensive lines are constructed. The limits of habitable land as yet untraversed by railways in New Zealand are too circumscribed to permit of any very rapid completion of such means • of communication. We cannot, es in America, open up by a single line in any direction thousands upon thousands of acres of virgin land and make Buch lands a free gift to occupants. In due course of time the trunk lines, defined in the original scheme oi railway construction, will be made. Wellington, Napier, Wanganui, New Plymouth, and Auckland will bo cbpneeted, and so also will be Nelson, HokitikfJ, Blenheim, Picton, Christ-

church, Titnaru, Oamaru, Dunedin and Invercnrgil). This, however, will be dove without resource to any such revolution in colonial finance r.s that Hip Julius Yogel proposes. Equally disingenuous and misleading aro his remarkf? on the general subject of colonial borrowing. He blames the Government for not having " resource sufficient to continue with intelligence the pr-- sedition of the railway system," the term " resource" being synonymous with " more borrowed capital." He further suggests that, railway liabilities provided for, New Zealand might live within its income, "except, perhaps, occasionally borrowing for some great public work," and yet, but a short time since, ho, fully cognisrmt that the entire voice of the colony was against further borrowing, concurred in such objection, and counselled tho Ministry to refrain. The publication of Sir Julius Vogd'a letter to his friend Mr. Curtis does not, in our opinion, nt all add to his reputation es a fiuancier or sagacious politician.

The lC Auckland Herfild " commenting on Sir Ju'iuß Vogel'a cluira on inn oniony na stated in tho ccrreeponJence «hich t«a9 published yesterday, and iso r4>plyiP|» to his letier to Mr Curtis, s :ys : — Apart altogether from the personal a*p u ct of the mutter, with which we aro entitled to deal freely when Sir Julius Vogcl expafiutoa with co much unctioa on h l 's own inefTabla merits, and the ingratitude witli which ho has-been troatod, wb contend that for all he bae lone be has tuen p*«i J, and well paid. fiU owe? everything to this colony, and it ia from him find not the colony, that s»rßliti;d© ia dup. Most men would be indHib'y imprcssßd with it, and rrarty aid p oid always to avow it. This ' n olotjy mide the man who cow figures a brgjnr ot i'Q «'>te. Heo#es much to himself, but itiflaitely more to the cpnortuniiy it guvo him, its support, us 'oo generous confi Jence. No tnon in •my colony bus turned public life to bt tier p?rßonnl account, or derived more frooa ihe public treasury. Ani still he haggles for raore, aod holds out an importunate band, every fioger of which is ei!'ed with the colony's gold, t\ni lie taxes the colony with ingratitude becoiiK' 1 , having floated the ioap us A?,ent-G neral, for the dutie3 of which office he was handsomely paid, Mr Hall refuses to grant him a com mission on ttie loan, asserting that th;e floating of if, was bis duty as Agent General, ood included in the payment for hia services in that capacity. The rapacity cf Sir Julius Yogel is limitl j 88. Previous io his resignation of thf position of he stipu- ! jtei for tho appointment of a corninirsioser for the conversion of the l.ans j aod, uncertain whether they would «c(. riJ of him without trouble, the Government uawisely conceded it. It is a lucrativo office ; but again he huygled, again the Government wero Grm, nn3 ha gava way rather than lose what he so well kofiw was worth the having. Thus he tork salary for years as Premier ; for a furiher coarse of yeara aa AyentGenersl ; he will still for a number of years be handsomely remunerated for the conversion of the loans ; ard possessed of all this good fortune, sll tbis pay — prec ia*lly a Stale pensioner — his greed still endeavours to clutch more, to wrest aad worry it frooa a colony bearing the increased burden of taxation mc-ssitafei by ils lorn fjuancial condition Sir Julius Vogßl is not only clever, he is pertinacious, aad sometimes foolish or worsa. What is to be said of a man who makes it a merit that in iha crisis of the financial difficulties of the colony, he, who owed it so mucb, did not resign his position a3 Agent-General, and abandoning the negotiation of the loan leave the colony to a financial crash, to national back-? ruptcy. Because he did not do that which would have b:ea nothing short of infamous, he otka our approval, may! be onr applause. What is to be said of Sir Ju ius Yogel, wbo, in a communi-i cation to the Premier, flattors biro, and exalts his own services in floating the loan by dwelling on the infinite peril of, the colony's financial condition, and in> a letter to Mr. Curtis, of NelsoD,: charges the Government with exaggerating the dangers of the situation" and! taxes it with " etupid feare." Whenj it suits his purpose Ihe financial! position 19 describeJ as one of life andi de*th, and when he writes a letter not; 9xp?cte^ to see the light, be pooh, poohs the alarm wbioh he professed to, Bharr. Sir Julius Yogel will have to ; be content with hia wondrous good fortune ; it, would have been better for bis reputation if he had abstained from this last attempt further to improve it. The colony is no* ungrateful, but Sir Julius Yogel is insatiably greedy.