Extract from the Evidence of F. A. Molesworth, Esq.

New Zealand Spectator and Cook's Strait Guardian, Volume II, Issue 52, 4 October 1845, Page 2

Extract from the Evidence of F. A. Molesworth, Esq.

3686. In order that I may test the accuracy of the account, will you state, if you can, the different proceedings of the governor, from the time that he arrived at Port Nicholson, with reference to this enquiry ? — He came there, and shortly after his arrival a levee was held at Port-Nicholson, at which a curious scene took place, I was there myself ; Mr. Wakefield, the son of Edward Gibbon Wakefield, went up to to be introduced to him ; he bowed, - and was passing on, when the governor called him back, and asked him whether he was the, writer of certain letters in a paper in England; they were sent to his father, and portions inserted in the paper; he said *' Yes;" when Captain Fitzßoy called him a " devil's missionary," and all sorts of names; we were 'very much disgnsted, and put on our hats and walked out, and there were very few presentations after that ; that was the first thing that occurred, 3687. Did this take place at an official levee ? —Yes. 3688. In your hearing? — Yes, I was present, and went out of the room aftei wards. 3689. What was the date of that levee?— l think it was the day after he arrived at Port Nicholson. 3690. Did nothing take place more than what you have related ; you say there was an official levee that morning; at what time? — I think about 12 o'clock. 3691. You, with other gentlemen, being there, Mr. Wakefield was presented I—Yes,1 — Yes, one of the first. 3692. By whom was he presented ? — His name was called ; he passed h s card in, and his name was called out 3693. Other gentlemen were in the room ?—? — I was, and several others. 3694. When he came to the governor, and his name was given, the governor addressed him by asking him if he was the author of certain letters? — Yes, he was passing on and he called him back, and said, " Mr. Wakefield," and he atked him whether he was the author of certain letters that had appeared in England. 3695. How did he describe those letters? — They were signed with young Mr. Wakefield'* name. 3696. The words would have been, " Were you the author of letters which appeared signed by your name in such and such a paper?" — Yes : he said, yes, he was ; I forget the exact words, and Captain FUzroy does not speak loud ; I did not hear him well, but that expression I heard, " You are a devil's missionary ; your conduct has tended very much to frustrate what the missionaries have been doing." Something to that effect ; he attacked him, we thought, in a very improper way. 3697. Was Mr. Wdkefield a Magistrate at that time?— Yes. 3698. Did he make any answer?— No, he never said a word ; he listened to the governor, and when Captain Fitzßoy had done, he went out of the room. 3699. How long might Captain Fitzßoy be speaking after this fashion? — Two or three minutes. 37(W. Did you hear any thing after that 1— No; no expression of that kind, but he spoke of his conduct : he had been a great deal among the natives, and had a great deal of influence with them, and he talked of this; that was one of the concluding remarks, that he was the devil's missionary.

In the discharge of our duty as Guardian of the interests of the public, we have thought it right to warn them from time to time of the effects of Captain Pitzroy's inconvertible paper, and to point out its probable results. We have shewn what we believe is now an admitted fact, that the issue of debentures considerably exceeds the amount fixed by his own ordinance, and that this overissue, is continually increasing from^the increasing pecuniary difficulties of the Government, and its inability to meet the demands upon it in any other way. A spirit of recklessness in monetary matters has characterized the Government of this colony from its first establishment. Its system, if it deserves the name, has ever been a lavish expenditure to gratify its hungry dependants, taking no thought of the morrow, nor making any provision beyond the expedients necessary to meet the wants of the passing hour. This makeshift plan commenced by Captain Hobson, was faithfully acted upon by Mr. Shortland, and by him bequeathed to Captain Fitzroy, who has in no degree been behind his predecessors in lavish expenditure, or proved himself more able than they to meet the pressing demands occasioned by improvidence and incompetency. It is necessary to observe that we are not now arguing against a paper currency convertible upon demand, because " those notes come to have the same currency as gold and silver money, from, the con-

fidencc that such money can at any time be had for them:" but an inconvertible currency of which the redemption is an uncertain contingency, and which from its overissue is becoming daily more depreciated. It is said that " Experience makes even fools -rise;" but Captain Fitzroy's folly is so hopeless, that it is in vain to, appeal to him from the results of past experience : without repeating arguments we have previously advanced, we may however be permitted to remind our readers of some examples of the ruinous effects of an overissue of papermoney recorded by the Father of Political Economy more than seventy years since, and apply the lesson to be gained from them to our own case. " Paper money," says Adam Smith, " may be so regulated as either to confine itself very much to the circulation between, the different dealers, or to extend itself likewise lo a great part of -.that between the deaieraand the consu-^ mers. Where no bank-notes are circulated under j€lo value, as in London, paper-money confines itself very much to the circulation between the dealers. ' Where bank-notes are issued r for so small sums as 205., as in Scotland, paper-money extends itself to a considerable part of the circulation between dealers and consumers. In the currencies of North America, paper was commonly issued for so small a sum as a shilling, and filled almost the whole of that circulation. In some paper currencies of Yorkshire, it was issued even for so small a sum as sixpence. " When the issuing of bank-notes for such very small sums is allowed, and commonly prac- ] tised, many mean people are both enabled and encouraged to become bankers. A person whose promissory note for £5, or even 205., would be rejected by everybody, will get it to be received without scruple token it is ittued for to tmall a sum at tixpence. But the frequent bankruptcies to which such beggarly bankers must be liable, may occasion a very considerable inconveniency, and sometimes even a very great calamity, to many poor people who had received their notes in payment." ! And in another place he says — " The paper currencies of North America con- ! sisted not in bank-notes, payable to the bearer on demand, but in a Government paper, of which the payment was not exigible till several years after it was issued; and though the colony governments paid no interest to the holders of j this paper, they declared it to be, and in fact , rendered it, a legal tender of payment for the I full value for which it was issued. But allowing j the colony security to be perfectly good, £100, \ payable fifteen years hence, for example, in a j country where interest is at six per cent., is worth little more than 40/. ready money. To oblige a ere- ] ditor, therefore, to accept of this as full payment for a debt of £100, actually paid down in ready money, was an act of such violent injustice, as has scarce, perhaps, been attempted by the government of any other country which pretends to be free. It bears the evident marks of hay- , ing originally been, what the honest and downright Doctor Douglas assures us it was, a scheme of fraudulent debtors to cheat their creditors. The government of Pennsylvania, indeed, pretended, upon their first emission of paper money inl722,torendertheirpaperofequalvaluevrithgold and silver, by enacting penalties against all those who made any difference in the price of their goods when they sold them for a colony paper, and when they sold them for gold and silver; a regulation equally tyrannical, but much less effectual, than that which it was meant to supfiort. A positive law may render a shilling a egal tender for a guinea, because it may direct the courts of justice to discharge the debtor who has made that tender ; but no positive law can oblige a person who sells goods, and who is at liberty to sell or not as he pleases, to accept of a shilling as equivalent to a guinea in the price of them. Notwithstanding any regulation of this kind, it appeared, by the course of exchange with Great Britain, that £100 sterling was occasional^ considered as equivalent, in some of the colonies to £130, and in others to so great a sum as £1,100 ciurency; this difference in the value arising from the difference in the quantity of papet emitted in the different colonies, and in the distance and probability^ the term of its final discharge and. redemption. " No law, therefore, could be more equitable than the act of Parliament, so unjustly complained of in the colonies, which declared, that no paper currency to be emitted there in time coming, thould be a legal tender of payment." And farther on he observes, — " The paper of each colony being received in the payment of the provincial taxes, for the full value for which it had been issued, it necessarily derived from this use some additional value, over and above what it would have had, from the real or supposed distance oftheterm of it« final discharge and redemption. This additional valuewas greater or less, according as the quantity of paper issued was more or less "above what could be employed in the payment of the taxes of the particular colony which issued it. It was in all the colonies very much above what could be employed in this manner." And in the history of the colony of MasBachusets Bay, written by Mr. Hutchinson, Lieut. Governor of that province, and published in 1 760 — after relating the occasion of issuing this paper money, he adds the following note, which, being the account of an eye witness, and one filling so important an office, is most instructive : — "The Government, encouraged by the restoration of credit to their bills, afterwards issued others for charges of Government. They obtained good credit at the time of their being issued. The charges of Government were paid in this manner from year to year. Whilst the sum was small, silver continued the measure, and bills continued their value. When the charges of Government increased, after the second expedition to Canada in 1711, the bills ' likewise increased, and in the same, or greater proportion, the silver and gold were sent out of the country. There being a cry of scarcity of money in 1714, the Government caused £50,000 to be issued, and in 1716, £100,000, and

lent to the inhabitants, to he paid in at a certain period, and in the meantime to pass as money. Lands were mortgaged for security. As soon as the silver and gold were gone, and the bills were the sole instrument of commerce, pounds shilling* and pence were altogether ideal, for no possible reason could be assigned why a bill of twenty shillings should bear a certain proportion to any one quantity of silver more than another : Sums in bills were drawing into the treasury from time to time by the taxes, or payment of the loans, but then other sums were continually issuing out, and all the bills were paid and received without any distinction either in public or private payments, so that for near forty years together, the currency was in much the same state, as if anhundred thousand pounds sterling had been stamped in pieces of leather or paper of various denominations, and declared to be the money of the Government, without any other sanction than this, that, when there should be taxes to pay, the treasury would receive this sort .of money, and that every creditor should be obliged to receive it from his debtor. Can it be supposed that such a medium could retain its value? In 1702, 6s. Bd. was equal to an ounce of silver. In 1749, 50s. was judged equal to an ounce of silver. I saw a five shilling bill which had been issued in 16^0, and was remaining in 1749, and was then equal to eight pence only in lawful money, and so retained but about one-eighth of its original value. Such was the delusion, that not only the bills of the Massachusets Government passed as money, but they received the bills of the Government of Connecticut, New Hampshire, and Rhode Island also as a currency. The Massachusets bills passed also in those Governments. In 1749 bills of credit were abolished, and unless the evils which they occasioned should be forgotten, the Government, it must be presumed, will never issue any more." We have been thus copious in our extracts, because these remarkable passages fully set forth, on the highest authority, the effects of that system which occasioned the law, that no paper currency to be emitted in any British colony, in time coming, should be a legal tender of payment. This is laid down as a fundamental axiom in the charter of this colony, but Capt. Fitzroy has openly disregarded it, and introduced into his Government the dishonesty and exploded ignorance in monetary affairs practised in the North American colonies more than a century ago, and so closely has he followed his prototypes, that with a slight modification of circumstances and change of names, the above might be taken as a description of passing events. In fifteen months from its first issue, Captain Fitzroy's paper is depreciated 10 per cent. ; whether it will become so depreciated "that £100 sterling shall be considered as equivalent to £130, or to so great a sum as £1100" of his debentures, whether pounds shillings and pence will become altogether ideal, depends entirely on the length of time he is permitted to remain the Governor of this colony. For these debentures have so many elements of deterioration in their composition, that but a comparatively short time is required for their development. Besides numerous other exceptions that might be taken, other promisary notes are precise as to the day of payment, that it shall be on or before such a day, Capt. Fitzroy promises to pay on or after, and only when he may think proper to appoint, and engages to pay interest, not until the debt is discharged, but only until the lOth April, 1846, while, from the petty artifices practised in the date of issue, in. the case of worn and defaced debentures, the payment of interest has to a considerable extent been evaded. Another evil consequence of this vicious system, namely, the numerous imitators which it is sure to produce, is now being felt in this settlement, and if not checked in time, threatens to become an intolerable evil. Adam Smith forcibly describes the mischief likely to arise from these small notes, where the lowness of the sum is frequently proportioned to the lowness of the credit of the issuer. Not only sixpenny debentures, but even threepenny and penny debentures are issued, and let any one who receives them as of any value, count the cost of enforcing payment in the event of refusal, by the person issuing, to pay them. It is with a view of, in some degree, checking the inundation of such worthless paper with which we are threathened, that we would offer a practical suggestion deserving the consideration of the commercial part of the community. Let all the debentures now in circulation in this settlement be retired by fifty pound de- ; bentures bearing 8 per cent interest, and let their place be supplied by notes issued by a Debenture Association of different amounts, from one shilling to five pounds, the fifty pound debentures which they represent being placed in the Bank, or in the hands of the Treasurer of the district, as security to the public for their redemption, and let no other debentures be received in payment. The effect would be to raise the value of Govern- j ment debentures, and put a stop to all spurious issues. The fifty pound debenture in* the hands of a private person would be useless to him, or, at the best, only a collateral security until its redemption by the Government, unless he had the power of circulating something which should be received as its equivalent in value. Such an Association would give this power, and if some pledge

were given by the Government to promote the arrangement by issuing no other descriptions of debentures than those of £50 (in conformity -with Lord Stanley's despatch), which would be exchanged for the debentures of the Association, and by taking care, at the same time, to contract their issues within reasonable limits, we conceive nothing further would be necessary. For whenever the Government paper is withdrawn from cir* culation, the holders of these notes would exchange them for the £50 debentures, and receive both principal and interest. It may be objected to this plan that it supposes a good faith on the part of the Local Government, and a co-operation with the settlers for the public good, of which we have had no example, and which it were vain to expect ; and that by facilitating the exchange of £50 debentures, it would encourage them to still further issues. We confess the objection has some weightj but - the present «je of our currenty imperatively requires anmediate application of some corrective. 4hink ttds suggestion if carried out would have the effect of preventing the further depreciation of debentures, and we shall be glacbifj by turning attention to the subject, some practical measure may be adopted which may obviate the evils from which we are suffering, and which, unchecked, will be productive of ruinous consequences.

Intelligence has been brought by the Mana, from Ouridi, of the arrival at Auckland of a British war steamer with a strong reinforcement of troops, and this statement has been confirmed by the Sarah Jane (the captain of which vessel received the information from the missionary residing at that station) from Hicks's Bay in the Bay of Plenty, about two day's sail from Auckland, and from other* quarters, so that we have every reason to beliieve it to be correct. It is stated that the steamer was sent out from England, and in the course of her voyage touched at the Cape of Good Hope, where the news of the disturbances in New Zealand had been received, and a considerable force from that colony was embarked on board the steamer for New Zealand. The amount of these additional reinforcements is stated to be 700 men, but we suppose this would include the force expected from Sydney. The name of the vessel has not transpired. We may expect to hear full particulars by the next arrival from Auckland. It is very probable that Sir George Gipps may have transmitted to the Home Government, via India, an account of Capt. Fitzroy's urgent application for assistance in the despatch in which he stated he was no Alarmist, after the second cutting down of the flag staff by Heki. As this was in February, it is possible that this news would arrive in England before the end of May, as letters may be transmitted from Sydney to England by the Indian overland mail in seventy two days. This news would be followed in due time by the account of the destruction of Kororarika. We shall not, therefore, be surprised if the next mail from England should bring news of a very important nature as regards the interests of this colony.

On Monday last there was a general review of the Mihua at Thorndon, when the usual evolutions were performed by the corps, who appeared to be in a highly efficient state of discipline. The militia were disbanded on the last day of the month, and their arms and accoutrements have been placed in the charge of the Commissariat. We shall take an early opportunity of offering a few observations on the impolicy of disbanding this force at the present juncture.

Horticultural Society. — We are requested to give notice that the next exhibition of the Society will take place on the first Tuesday in December, and also to remind the Members that their Subscriptions for the present year are due. We are sorry to learn, that unless the arrears of subscriptions now due to the Society can be got in, the Committee will only be enabled to have one exhibition in the year.

On Monday evening, a Ball was given at the Assembly Rooms, by a majority of the officers of the Garrison of Wellington, to one of the most numerous and select parties that have ever graced a Wellington Ballroom. When we state that dancing was kept up with great spirit till past six in the morning, and that every one expressed themselves delighted, it would be superfluous to say more in praise of the exertions of the Committee who conducted the entertainment.