The Patea Mail. (Published Wednesdays and Saturdays.) WEDNESDAY, DECEMBER 17, 1879.

Patea Mail, Volume V, Issue 485, 17 December 1879, Page 2

The Patea Mail. (Published Wednesdays and Saturdays.) WEDNESDAY, DECEMBER 17, 1879.

It is a matter for congratulation that the £5,000,000 loan has been easily floated. All things considered, wo may claim that it has been a ve v y great success indeed. When we consider the enormous indebtedness of the colony, which has not escaped severe criticism in the leading journals of Europe ; and when we consider the commercial distress known to prevail here, as everywhere, and the feeling of mistrust which makes money shy and cowardly, and the well advertised and darkly painted state of our own public finances, and the unsettled state of politics in the colony, and the threatening aspect of Native affairs, and the frequency with which the British lender has been bitten by lending too freely to countries that borrow too freely ; and when it is also borne in mind that the present loan is the largest the colony has yet asked for, we cannot but be surprised to learn that it bus been subscribed nearly three times over. Not long ago, our neighbour, Victoria, with a much larger population, and a much smaller debt, tried to raise a five million loan, and only succeeded with a part of it. The contrast is enormously in onr favour, and would warrant a little vanity, if New Zealanders were susceptible of anything of the kind. We have often been called “ England’s pet colony,” and certainly England gives us very practical proof that wo are in her favour. Victoria, like Oliver, asked for more, and was snubbed; New Zealand asked for more so often and got it, that this time she asked for more “more” than she had ever asked for previously, and the partial old nurse ladled it out till the basin ran over. We naturally ask what the cause of all the favour shown to New Zealand is. It stands on the face of it that our credit is good ; but why is it good ? How can we reasonably account for the different receptions accorded to Victoria and to New Zealand by the British money lender? Many ridiculous people see the reason in the accession to power of the Hall Government, and the downfall of Sir George Grey. Although we have never shown too much love for Sir George, we have too much respect for ourselves to give countenance to such a sdly idea. Only a small per cent age of the people who handle money in New Zealand can be said to be tolerably posted up in the affairs of a great country like England; and are wc to suppose that people in England, with themselves and their mighty neighbors to third? and road about, are posted up in the petty party differences of New Zealand, which are of about equal importance with a squabble in the Corporation of Liverpool ? No doubt some of the leading firms, brokers, banks, and what not, make it their business to watch the progress of events in the colonies; but our loans do not come from them, but from the mass of the people. Clergymen, spinsters, widows, and saving people of every class offer the amount they wish to lend; and in the present instance seem to have offered nearly three times the amount required. It is the height of absurdity to suppose that these people are in any degree affected by the state of parties in New Zealand. The probability is that they do not know that their money is not being borrowed to make a railway from Wellington to Sydney. In fact, the success of the loan argues their ignorance. Nothing is more easily frightened than a million pounds —excepting five millions. There are plenty of unpleasant, firstsight appearances about Now Zealand to frighten money, and only a very thorough acquaintance could remove the fear and restore confidence. Either, ’ then, the subscribers of the loan are totally ignorant of the colony, or they are thoroughly acquainted with its condition and prospects. But, as we cannot allow’ that they have that thorough acquaintance which is requisite to restore the confidence that has once been shaken, we conclude that neither have they the smattering of knowledge required to produce alarm. Victoria did not study the old world type of human nature, hence her failure. In old countries, the money-lending classes think that those deadly enemies—Reform and Revolution —are bosom friends, and they know that Revolution and Repudiation are relatives. What wonder, then, if they saw some connection between Reform and Repudiation. Now, Mr Berry made the great mistake of going to England with a Loan Bill in one hand, and a demand for high-handed reform in the other, and came back, as a matter of course, with only half the loan, and no reform at all. Now Zealand has been wiser. She has, while meditating her reforms, kept the quiet side toward London ; she has indulged in no Black Wednesdays, and sent home no Embassies. Moreover, she has, by long experience, learned to put on that easy air of self-confidence which only the I hardened borrower can assume, and which at once reassures such confirmed lenders as the British public. She talked first

about ten millions, and then asked lor live. Now, bad she asked for two millions, there would have been danger. But while the colony has some reason to be proud of being such a favorite, she ought to begin to pray, “ Save me from my friends.” Credit is a good thing, but it is all the better for being kept. New Zealand is too anxious to measure the extent of her credit, forgetting' that when it re all measured, will be all gone. Instead, therefore£.pf being overjoyed at having proved'gthal the-world would trust her for £5;OOtO,,OOt) more, let New Zealand begin to think that the world wdl now trust her £5,0U0,000 less.

This is a fitting occasion to add a little to our recent rcmaiks on the borrowing mania, and on the use that is made of the money. “ Reproductive Public Works” has been the borrowing cry hitherto. It is very plansable and lias deceived the world, and no doubt many people, even in New Zealand, are amassed to find that less than nine millions have been spent on railways, and that those railways only pay a little over two-fifths of the interest on their cost, and consequently cannot pay even one per cent., or nearly one per cent., on the whole amount borrowed under the ingenious borrowing cry we have mentioned. New South Wales, with far less ‘ blow’ about Public Works, has spent far more money on railways than New Zealand has, and yet her debt is very much less than halt of that under which this colony is now groaning. As we are told that a considerable portion of the new loan has been anticipated, we may fairly set the present indebtedness of the colony down at £24,00U,U00. A little more than onetliird of this has been spent on Railways, What has been done with the rest ? Some millions have been spent on Immigration, and something more on war ; but there is still a margin of several millions left for which there is nothing to show. New Zealand has carried her loans in a sieve which every Maori, and contractor, and land shark, and shipping Company, and money broker, and starved out diggings has been allowed to shako at will.

But not only lias she squandered her loans, but she lias also squandered her Land Fund. Linder this head the colony has received, or ought to have received, if she had not given it away by hundreds of thousands—as in the case of Piako considerably more than £10,000,000. This, as wo showed in a recent issue, was capital and not income. It was borrowed, however, from muchenduring posterity, interest free, and without oven a promise of repayment. If railways, or other useful works had been built with it, then it would have been a permanent investment, and would benefit all time, as it would have rendered a large proportion of our borrowing unnecessary. As it is, the case stands thus : New Zealand lias spent about £34,000,000 move than her income, for which she lias to show railways to the value of about twenty-five per cent, of that amount. The question returns still more forcibly : What has been done with the money ? It has, in the first place, been wasted in useless works, such as water-races, in which the colony has invested a vast sura that pays something less than one per cent, per annum, but which, at the same time, enables several hundreds of men to earn by gold digging considerably less than they could earn in any other employment. In the soeond place, it has been spent in paying current expenses that should have been paid out of taxation. Even portions of loans, have been appropriated in this way. Land is purchased from the Maoris with borrowed money—about a million is engaged for in this way at the present moment —then the land is sold, and the whole proceeds coolly used as revenue. Thus we perpetrate a double wrong. We stake onr credit wholesale to get hold of the capital of other countries, and having got it, we use it to get hold of our own capital —the land—and then we spend both, and that’s the way the money goes. The only shred of argument offered in justification of thus wasting the substance of onr country in riotous living is, that it is right to use the Land Fund to pay the interest on the cost of “ Public Works ” until they can pay for themselves. The fact is, that railways never do pay. Even in England, with dense population and enormous traffic, with cheap fuel, cheap labour, and cheap iron, and, above all, with private management, directed so as to foster traffic, railways do not pay. But in New Zealand we have spent over and above our revenue, four times the cost of all our railways, and “ignorance made drunk” would never dream that, even with all our vitality, onr railways will clear off such an encumbrance.