SOME REMARKS ON THE RESOURCES OF NEW ZEALAND.

New Zealand Times, Volume XXXII, Issue 5116, 16 August 1877, Page 3

SOME REMARKS ON THE RESOURCES OF NEW ZEALAND.

. By Sir : Julius Vogel. . (From “ Fraser’s Magazine.”) i The writer of the article “ Australia and New;Zealand,-” iu the last number of “ Fraser’s Magazine,” took a very gloomy view of the position of ,New Zealand.. I think I am not unfairly describing his principle argument when I say it is substantially this —that the prosperity New Zealand enjoys has followed the expenditure of large amounts of borrowed money, and that as this expenditure comes to an end there will be a reaction consequent upon the cauae.of that, prosperity being withdrawn. This argument f ai fairly urged, and. the article is very, able, but I submit that the writers’ reasoning, as far as New Zealand is concerned,' fails because he has had to trust to the observation of others for some of the facts which he accepts. No matter how clever and diligent a'writer may be, he.'is in an inquiry of this kind at a great disadvantage if his statistical information is not supplemented by personal knowledge. Supposing the accounts he relies on to be all true, they may not be exhaustive, and the clever commentator, if he had been able to judge for himself, might have seen many qualifying .circumstances to disturb the judgment which he forms on the reports of others. In the present case, 1 if the author had been in New Zealand, he would recognise that he had mistaken : cause for effect. The prosperity of the' colony has not been caused by the expenditure of the borrowed money, but it is an effect arising from the objects to which the expenditure has been devoted. Of the £10,116,000 spent on public works and immigration, £6,860,000 has been expended in the colony; the balance has been used in England forfhepurchaseof railway plant and the payment of passages of 'immi-. grants to the colony. At no time it has been reckoned were more than five thousand laborers employed on the ; public works—a number so small compared with the total labor employed in the colony, that a gradual reduction could not have, and as a matter of fact has not had, any distressing effect on the colony. ; The prosperity of New Zealand is consequent upon the opening up of the large additions of country to profitable settlement. The railways have made land available which was before shut out from a market. The railways completed and open are paying, it is estimated, about three per cent, net on the capital expended, which very • much reduces the harden of their cost. , But such areturn is' the least part of the , good they are effecting. They have given not a- fancy but an 'intrinsic value of many millions additional to the land of the colony. I am not speaking of conjectural value, but value for use, which value in the shape' of returns is making itself felt throughout the country. The employment on public works has for some time been much reduced, but the effect has not been what the writer anticipated. During the month of March last £90,000 of land -was purchased from’ the Government in the province of Canterbury alone. Instead of the labor market being overstocked, the Agent-General lids ; instructions during the next five months to send out five thousand immigrants. A curious effect of the employment on the public works and the demand for labor for opening lip land for settlement showed itself on the goldfields. There can be no question that only a small portion of the gold ■ in New Zealand has yet . been secured. But as the labor of the colony became absorbed, as I have described, the yield of the goldfields. fell off. Now that again the demand - for labor has lessened, the' prosecution of gold mining has come more into favor. “ In Otago'rich quartz reefs have been discovered, the yield from which promises to he large. On the west coast of the Middle Island, and in Nelson, alluvial mining has re- ‘ ceived a considerable impetus, and there has been quite a revival In the value of mining' property at the Thames. During the month before the April mail left, £60,000 was paid in

dividends to the shareholders in .the Thames mines. The writer has not takeix into account the strain on the colony caused by the payment of interest on works uncompleted. At the present tithe interest is being paid on’ some three millions of -unfinished railways. This is much less than has been the case during some part of the last seven years. The gradual use of and returns from the railways, as they are completed, are surely to be set against the gradual reduction in the number of laborers employed. The actual extent of the debt of New Zealand appears to be accepted by the writer as excessive, and he assumes that the colony must suffer in consequence. The result is apparently not arrived at from a consideration of the circumstances of the colony, so much as from a comparison of the debt of New Zealand with .that of other colonies. The author in dealing with his subject (“ The British Trade ’ of Australia and New Zealand”) in a: large and comprehensive, not to saj' philosophical manner, { has scarcely given sufficient heed to the very different circumstances of the colonies, arising out of . configuration; size, and . climate. For example, he comments upon .the want of cultivation of wheat in some {colonies. With the opinions in favor of free trade which he advocates, he would cer; tainly not desire that a colony should grow grain which it could import cheaper, and neglect producing that by exporting which, it could profitably pay for the grain imported; {Now New South Wales and Queensland arenot suited for wheat, ■ whilst South Australia grows it to advantage. Still, when comparing the land under wheat in South Australia and, New Zealand, it has to be remembered, that successful as the former ,is with, wheat, the success of New Zealand is much greater. The writer indeed incidentally refers to this when he mentions that the average yield of wheat to the acre in New Zealand is 31 to 32 bushels, whilst in South Australia it is ‘ at the best of times’ eleven and a half bushels to the acre. Queensland presents a remarkable example of the difficulty of judging the colonies from a single standpoint. Although this colony may not favorably compare with its neighbors in those respects which have most remarkably aided their progress, it has peculiar qualifications of its’own. The development of settlement in Queensland since it became a colony is, marvellous. The storage of water his given a value to immense tracts of its territory which a few years ago would not have been considered possible. It is now turning attention to the production of those articles for which its climate issuited. Toomit,asthewriterhasdone, all reference to the production of sugar in Queensland, is to overlook one of the great hopes of this colony. Not as a temperate, but as a mildly tropical country, Queensland has no reason to fear comparison with other colonies, or to be timorous of the great efforts it has made to develop its resources. To return to New Zealand. There is no ’ reference made to the native wars which in times past desolated that colony, whilst it is asserted that none of the colonies “have tasted the bitterness of war taxes.” Nearly a third of the public debt of New Zealand might be attributed to native disturbance, instead of all being set down to voluntary expenditure on the part of the colonists. New Zealand, the writer says, “rejoices in a debt of nearly £20,000,000, or something like £SO per head of the population, which, itself does not reach 400,000, Maoris included." This statement exceeds the license which may be permitted to a statement in. round figures. The population at the end of 1876 -is officially estimated at 399,221 of* Maoris, with Maoris added, over 444,000. : The public debt, less the amount cancelled by sinking fund and the money unexpended in hand, could not have amounted at the end of 1876 to more than £18,500,000. This gives a. debt of less than £42 15s. a head, instead of .the £SO stated by the author. He is right in including the Maoris, for they contribute largely to the taxation, and many of them are very rich. Supposing, however, they were excluded, the debt would be less than £46 10s. per head. I do not attach much importance to the excessive estimate which the author has made, for the debt per head of the population conveys no meaning if it is unasspoiated with the question of what the, debt is for, and the capacity of’ the population to meet its annual charges out of their earnings. With the wages prevailing in New Zealand, the laboring classes, as well as the more wealthy, would not be distressed by double - the amount per head of population payable for taxes' in this country. The only true test' of a country’s burdens- is the ; weight . with which ; they fall; on - the earnings of the people. l I might also ask the author to consider what Government expenditure in the colony means. In Great Britain the expenditure from the Consolidated Revenue does not mean interest on the cost of the railways, nor does it mean much of the cost of education; police, gaols, and lunatic Asylums. In tlie colony the revenue supplies all this, excepting some fees for' education. When: the capital burden per head of the public debt in this country has to be compared with that of New Zealand,,’ the capital cost of the railways should be added, and the capitalised'burden: of the poor rates. . In a paper recently read by Mr.-Hamilton before the Statistical Society of London,’ the following passage occurred ; —; _ - In' contrasting the Indebtedness of New' Zealand with that of the United Kingdom we must add to the National Debt the cost of railways, and capitalise the poor-law rates, which do not exist in the colony, thus | , - Umited Kingdom. .National Debt, as it stood 1875-G ~ ... £777,000,000 Expended on the poor, average for- ■ v ■ iten years ending Lady-Day, 1876, £9,210,053 capitalised at 4 per cent. 230,000,000 Eailways, 10,0X4 miles open December, 1876.. ... .. •- .. .. 030,000,000

. :. : £1,637,000,000 Or, £49 12s. Id. per head for United Kingdom. I have already said that at the end'of 1876 the public debt in New Zealand amounted to £42 153. per head, including Maoris, or £46 10a. without them. It hiis to be borne in mind that New Zealand has an immense landed estate. The railways have enormously added, te its value. Its extent) is about thirty-four millions of acres. For j the last five years it has averaged fort sales and leases an annual return of £820,000. The population of the colonyy , increases bo fast that calculations based; on the population to-day are fallacious ; to-morrow. It is evident, if population is; to be a test,,that a country whose population increased rapidly would be justified—nay, would be prudent—in more largely discounting the future than one whose population was nearly stationary. Again, railways in New Zealand may be regarded as substitutes for ordinary, roads. These- used- to ,be made at the cost of the colony, and it was considered fortunate if the tolls yielded enough jto maintain them. Now the.'railways are yielding a considerable part o£“'the’ interest on their cost. The balanc'd niay fairly he set doWn against the cost of ordinary, roads, only that balance will soon be 'bridged over. And meanwhile, in place of ordinary roads they are equipped roads, including in their cost and net results the'means for carriage and the motive power. Experience in New Zealand has , indeed proved that a small number of people may, as I have said; safely discount the future, if they can rely on a large increase of population. In 1859, when the province of "Canterbury possessed less than 13,0f)0 people, the Superintendent, Mr. Moorhouse, conceived the idea of constructing a tunnel between Lyttelton and Christchurch, a mile and .three-quarters in extent, to do away with the 1 serious disadvantage under which a great part; of the settled country of the province labored in being‘shut out from convenient access to. the coast. : The cost of the 'tunnel alone,] without the riilway on either side, was estimated at a quarter. 6f a million, and for' the few people then In the province it;; was .a most; .‘serious ,undertaking. In fact, Mr. Moorhousc’s proposal may be said to be the first conception of the importance to the colony of executing large public works to improve the means of communication and open up the lands for settlement. The tunnel was' made, arid, (Danterbury has ever since been, pnd is now,'one of, the most pros-perous-places in , her Majesty’s dominions. This is at least proof that no hard-and-fast rule can be laid down to. forbid a community from committing itself to great expense upon the faith of an anticipated large increase of population. 1

In connection with cultivation in New Zealand the author says :t— .•; Acording to the returns of last year about 2,400,000 acres were under cultivation, of which 91,000 acres were sown in wheat. This is a small proportion, and of course precludes the colony from being able to export grain; indeed,'it has to import, which is always an extravagant position for a young colony to assume. The writer labors under a mistake in this passaged New Zealand does export more grain and flour than it imports, as will be seen from the following figures Value of imports of flour and grain of all kinds, excepting rice

1873. ’ ' 1874. 1875. £193,858 £126,432 , £116,919 Value of exports of the same kind 1873. 1874. 1876. £148,587 £319,018 £239,796

K In respect to the general reflections contained in the article about the relative proportions of the value of imports and exports, it may bo said that all theories on this subject are liable to disturbance from causes which, ; whilst they affect the amounts) are of a more or less exceptional nature. Especially is this the case in sparingly populated countries like New Zealand. Take, for example, the following amongst other causes liable to disturb theories built upon the uniform interchange of, trade. In New Zealand some six ;hundred miles .' of railway have been built during the last few years, besides that some three hundred miles are,in course of construction. The plant required has represented an abnormal increase of imports. The increased demand for labor for public works, and for the preliminary operations in connection with bringing land under cultivation, reduced the gold production, and therefore the exports. The large number of persons going to the colony involved the use of a great many ships, which led to a considerable excess of available freight, consequently larger stocks of 'goods were sent than were required for immediate consumption, and the imports were abnormally increased. Hence the imports during 1875 exceeded those of 1876 by over £1,100,000. Again, the variable value of produce, of wool especially, is liable from year.to year to much affect the declared value of- exports. Another circumstance to be taken into account is the reshipment of imports. Victoria has, for example, a very large intercolonial trade, whilst New South Wales and New Zealand ship to the Pacific Islands considerable quantities of the goods they import. As far as the future is concerned, the wool, the gold, the agricultural produce, and timber exported from the colony, are likely to maintain a fair proportion to the imports. .It is, of course, well understood that that proportion, for prosperity’s sake, should be somewhat less than the value of the imports to account for the introduction of fresh capital and the expenses and profits yet to be realised, although represented by anticipation in the declared value of the imports. X will riot, however) go into the question of the relations to be desired between exports and imports, for it is a very, large one, and in its many bearings so fascinating as to .be likely to lead one into lengthy digressions. Suffice it that tEere is.nothing in New Zealand's position to warrant fear of an unhealthy relation between the exports and imports of the country. Eor the rest, what better assurance of the well-being of the country can, be required than that which the facts supply? In the face of those causes, such as diminished expenditure and employment on public work?, upon which the writer relies, the prosperity of the colony has increased. There is a good' demand for labor. Besides the immigrants whose passages are paid by the Government, the number ,of other immigrants arriving exceeds thp total number' of departures from the colony. Laud is eagerly bought, the railways are immensely used, thousands of happy homes are,being created, the people are content and employed, the wealth of the country increases, and those who only show their interest in the colony by investing money ,in it, whether .in mortgages ox- joint-stock' enterprises, get so large an annual return for their investments that they get back their capital in a few year?, in addition to the interest which in this country they might have obtained: ; Is it to. be wondered at that those who know these things I continue their investments in the colony, undeterred by written theories ? New Zealand, with its serviceable climate, its freedom from droughts, the extraordinary capacity pf its lands, its splendid water carriage, and its capabilities to support millions of human, beings, is the country of greatest promise to suitable' irrimigrants. Its population at the end of 1869, including Maoris, was 282,000., Its present population is not far short of half a million. In ten years it is likely to be the ipost populous of all the Australasian colonies. ; Had it not been for the native difficulties, how liappily set at rest. New Zealand would probably by this time have a larger population ■than all the Australian continent.