THE SOLVENCY OF THE COLONY.

New Zealand Times, Volume XXXIV, Issue 5737, 19 August 1879, Page 3

THE SOLVENCY OF THE COLONY.

The following facts, adduced by the Hon. Dr. Grace, in his speech on the Goan Bill, as to the solvency of the colony, are well worthy of an attentive perusal: But the thought which came into my mind when X heard my honorable friend Mr. Waterhouse speaking in regard to our financial prospects was this ; Are there no other sources of wealth besides exports and imports which my friend might have failed to consider ? And I think there are. I think, with regard to the question of imports and exports as a test of our prosperity, that it is necessary to consider this : whether the imports may not have been largely used for the purpose of developing the resources of the country and putting the country in a position at some time in the near future to export more largely. I maintain there are other tests of the wealth of a country of this kind, besides mere exports and the value of wool. Are not men and women wealth in a country of this kind ? Is not population wealth ? Does not population contain within itself in a country of this kind considerable elements of future prosperity ? I hope so. Otherwise our prospects in the country are bad indeed ; otherwise the folly of our ever having entered into a public works and immigration scheme is very great indeed. X find that between 1871 and 1878—the period for review which my honorable friend has selected—the population increased from 256,000 in round numbers, to 414,000. That increase alone of over one-third in seven years is a great addition to the material wealth of the country. And what does that material wealth of a country consist of ? It consists of the people who live in that country—in the fact of their being well nourished and well clad, and in the fact of their being able fairly to bear the necessary incidence of taxation for the purpose of the protection of the institutions under which they live. But that is not all. I find that in 1871 we produced 1,800,000 bushels of wheat; that in 1878 we produced 6,336,000 bushels of wheat ; that we had increased the production of wheat—which is a fine measure of the stability of the country—over three times within that period. There were produced 3,800,009 bushels of oats in 1871, and 5,900,000 bushels in 1878—we nearly doubled our production of oats. Our production of barley remained very much as it was before. But that which I think of more importance to the consideration of this question than either of these modes of testing the value of the position which the hon. gentleman took up, is the position we occupy with regard to the land and the position which the land occupies with regard to the wealth of the country. I find that in 1871 there were 116,000 acres of land broken up but not under crop ; in 1878 there were 272,000 acres of land broken up but not under crop—very much over double. Under grain crops there were 222,000 acres in 1871, and 456,000 acres in 1878. The produce of the country in that direction has almost doubled itself. Under green crops in 1871 there were were 25,000 acres, and in 1878 185.000 acres : that is to say, the development of the country in this direction has increased seven-fold. But in sown grasses—and I would draw the attention of hon. members to the fact that this is essentially a pastoral country in its present condition—there were in 1871 776.000 acres, and in 1878 there were 2,600,000 acres : in other words the area of sown grasses had increased four times. Thus, in regard to our population —which I believe is a very material element of wealth, and indeed had we before us at this moment a calculation of the exact cost of the introduction of 100,000 statute adults into this colony, we should soon realise what an enormous amount of money it is equal to— I say that in those seven years we increased our population one-third; we increased our cereal products, and we increased the area cf land under cultivation, in the ratio just set forth to hon. members. But that is not all. I find that in 1871 the export of gold was £2,788,000, whereas in 1878 it was £1,244,000. Now, I would ask hon. members to mark the material reduction in the export of this commodity, which is the most fluctuating commodity the colony possesses, and the least reliable test of the wealth of the colony, and of its importance in relation to other colonies similarly constituted. We find that, putting gold out of the question, or supposing that the export had not altered, our revenue would have been £1,608,000 more than it is. That is to say, granting that the export of gold had been the same, our position as a revenue-producing country would have been quite different from what it is. I would simply seek to draw the attention of hon. members to the fact that if our export of gold has diminished since 1871, it is simply because the current wages of the laboring classes have enormously increased. We have diverted labor from the production of gold towards the construction of our public

works ; and for my own past I see no reason why, if labor were restored to the position which it occupied in 1871, and w, re again concentrated upon the gold industry, we should not increase this particular export ; because at least it will be admitted that the gold which has not been dug is still there, and its existence in paying quantities is demonstrated hy an exportation of one million and a quarter sterling worth in'lß7B. Now, lamby no means sure that we are not the richer for the fact that the gold has not been exported—richer in a modified form, of course. But the fact is, that the price of labor in this colony has been so high that nothing has been so gold-producing as the pick and shovel. Wages have run up so high that it pays men better to accept Bs. a day certain than to go fossicking about the country looking for gold. My hon. friend seemed to entertain the opinion that not more than a third of our public indebtedness had gone io the shape of reproductive expenditure. The Hon. Mr. Waterhouse ; Between a third and a half. The Hon. Dr. Grace ; I had hoped that the amount expended in a reproductive maimer was considerably greater. I have not had the time or opportunity to satisfy myself on that point ; hut though I accept with the respect to which they are entitled the figures submitted hy tho Hon. Mr. Waterhouse, I still live in hope that when they are analysed it will be found that he has materially under-esti-mated the amount of reproductive expenditure.

As to subsidies —. we are paying £250,000 a year under this head. It is true that in many districts these subsidies are simply of the first importance to the development and progress of the State ; but it is equally true that these subsidies are not uniformly of such importance all over the colony. Still, as it seems impossible for us to display sufficient patriotism to assist those local bodies where assistance is absolutely necessary, and refuse to assist them where it is not necessary,—since such is the unfortunate position which our want of true political sagacity forces us to accept, —it will be necessary to do away altogether with these subsidies to local bodies, and thereby save £250,000 a year. But, sir, we require to do m,ore than that. We shall require to lessen expenditure on education. We are now expending £300,000 a year upon a system of education. Hon. members of this Council will do me the justice to admit that I have always declaimed against the folly of teaching comparatively wealthy people to look to the State for free education. When I did so, I did not do so blindly. I did so with a keen appreciation of the necessities which our financial condition would enforce upon us. I say —and I am sorry to be forced to say it—that the colony is not in a position to pay £300,000 a year to educate the children of men who are getting seven or eight shillings a day. But it is not that alone ; but we are paying £300,000 a year to educate the children of men who are getting £2OO a year, £3OO a year, and so on. But it is not even that alone ; but the colony is not in a position to make any sacrifice, directly or indirectly towards high-class education. If we are to be what we desire to be—clear-headed, honest men—we must look our position in the face, and apply the pruningknife. We cannot apply that pruning-knife to a better purpose than to those two items I have mentioned. There is no possibility,in my opinion, of avoiding these reductions ; and I have clearly foreseen for years that the possibility of continuing such an expenditure was something uu- ■ reasonable to expect. Then, sir, comes the consideration of the recent political agitation, which, though it has not disturbed the country, has impressed outsiders witli the idea that ‘ politically we are in an unsettled condition. ; We know ourselves and each other a little better than that. A little bubble of excite- ; ment, more or less, is nothing to us ; hut the impression existing without of unsettled legislation, of experimental finance, of unsound political principles, is a matter of great concern. I have always maintained that the most imperative of our duties is to labor for and earn a character for sound financial wisdom in this colony; to labor for and earn a character for political solidity, for political clearness of view ; to labor for and earn a character for general integrity of purpose both to those outside and inside the colony, jointly interested. Sweeping aside all these contentions with which I have endeavored to modify the view which the Council might fairly take of the gravity of our financial position as defined by the Hon. Mr. Waterhouse, I would say this : After all, what does it amount to ? At the very worst, taking his own figures, the outgoing would not amount to, all told, more than £7 10s. a head—man, woman, and child. It is an enormous sum of money—that is, including public and private debt. The outgoing of gold at the very worst, taking his own calculation, would not amount to more than £7 10s. a head—man, woman, and child. It is a great deal of money, lam free to admit. I am not a man, in dealing with a difficulty, blind enough to employ sophistry. I am not a man, when face to face with a grave condition of things, willing to intoxicate myself with silly words. I have endeavored to demonstrate to this country some of the reasons that indnee me to think that the material wealth of the country is not to be measured by its exports alone. My object is to draw attention to the fact that, with a wise fiscal policy, with a sound and equitable adjustment of taxation, with a steady, equable political atmosphere all around the country, with au influx of foreign capital for the development of our resources by the instrumentality of the various means through which that development must take place, the requirements of the labor market must be so great that wages would be maintained at very nearly the same figure as now. A working-man, even to this hour, without difficulty pays £3O a year for a miserable shanty to live in ; he lives in great comfort and wealth, and if he had to pay out £3O more—striking the average all round—he would be able to do it. I say that, providing foreign capital is not driven away, providing we are true to ourselves and adhere to sound political principles, even then the taxation would not be such a taxation as the average producer in this colony could not bear. More than that, sir, nothing could so conduce to the ability of the taxpayer to pay as the introduction of foreign capital for reproductive purposes ; and if in mathematics there is a geometrical ratio, so in the productive power of Nature there is also a geometrical ratio of development, the exact amount of which we have not estimated ; and it we fail in everything else, we should at least succeed in settling a great people—founding a great nation.