PATEA COUNTY MAIL PUBLISHED Tuesday, Thursday, and Saturday. TUESDAY, NOVEMBER 2, 1880. LAND AND CREDIT.

Patea Mail, 2 November 1880, Page 2

PATEA COUNTY MAIL PUBLISHED Tuesday, Thursday, and Saturday. TUESDAY, NOVEMBER 2, 1880. LAND AND CREDIT.

The credit of this colony is being damaged in the Home market by severe criticisms and “ exposures ” of the financial position of Now Zealand. Many influential newspapers have analysed our position in its purely financial aspect, and have concluded that bankruptcy is fast overtaking this colony. The conclusion is natural, and not easily disproved. It is easy to assert that the colony has undeveloped resources which could discharge its debt twice over. That is a mere demonstration on paper, but it is not an answer to the charge that the colony has not the means at present of meeting current liabilities without farther borrowing—that we must borrow again to pay interest on what wo borrowed before. A nation which borrows money on internal assets that cannot be realised is a nation of gamblers. It is assuming that the assets can be realised when wanted, whereas the assets cease to have a market value just when a forced realisation becomes necessary. The principle would operate thus. Say this colony becomes unable, two years bonce, to pay interest on the public debt: what would be the effect of that? We should bo proclaimed a nation of bankrupts; and that fact would deter, and the anticipation of it would have previously deterred,emigrants from coming here to occupy unsold lands. Our merchants would cease to have credit at Home, because a general collapse of trade would cither ensue or would be expected to ensue; and the very expectation of bankruptcy would load to bankruptcy. Thus our credit would be gone in a day ; our mercantile credit must follow suit, and would partly precede the other: while the general anticipation of disaster would drive away much capital and labour already here, and would frighten oft' other capital and labor from coming here. Such a collapse would partly precede and partly follow the actual declaration of our inability as a nation to pay interest on the national debt. As soon as the process set in, the end would come with increasing percipitancy. Each frightened capitalist, each timid settler, would impart his fright to many more, and the general effect of increasing loss of confidence in the colony’s stability would hasten the colony’s collapse. What would our undeveloped resources be worth then ? The resources which we possess, the land we cultivate and the stock and buildings on it, would lose five-sixths of present value. Land still unsold or unoccupied would cease to have a value, even on paper. It is the presence of thriving settlers on the coast that gives a value to inland country not yet opened. But let the coast population be blighted with financial depression, and decimated with panic, and then what becomes of the paper value which you had put on the unopened interior ? The interior had not been opened in a time of prosperity : how could it be opened amid ruinous panic ? Your “ undeveloped resources” are gone at a blow. They never had a real value : it was a prospective value, and nothing more. Like other prospective values, it disappears when the prospect is destroyed. These “ undeveloped resources” are a sham asset for the national credit to rest

on. The only way to make them a real' asset is to develop them. Put settlers on the land, and the land acquires a triple value ; for the Government get firstly the market price per acre, they get secondly the benefit of new heads to tax, they get thirdly the benefit of increased Customs revenue. There is a fourth benefit which is not inappreciable, for as new settlers have’new wants, the supplying of those wants sets the machinery of trade in motion, and every merchant or dealer who helps to turn the machinery of trade does so at a profit. We look on undeveloped resources as a sham asset, because the creditor can do nothing with the asset if he takes it. We believe in the asset only to the extent of its value when realised. No business-man would value an asset at any higher rate than the market price it would fetch as a saleable commodity. The value of this colony’s assets is regulated by our land policy. If the Government of the day cannot or do not develop those resources, we must take it that the resources arc not worth *' ( developing” in present circumstances. That conclusion is absurd on the face of it. Land is wanted ; and the real difficulty is not the absence of buyers, but the absence of a land policy. The difficulty which prevents the colony’s assets from being realised is one that Ministers can remove. Roads to unopened land should precede the sale of unopened land. New settlers cannot bo expected to buy sections at any price until the sections are approachable by practicable roads. Sections sold before roads are made must bo sold at a sacrifice in value which would more than pay for the roads. As a matter of experience on the West Coast, there arc plenty of sections open to selection in the southern part of Patea County, but no settler knows the location of particular sections when he gets on the right block, and he can find neither roads nor tracks. If our Land Commissioner would address himself to this question of roads up to the bush side of the coast belt; if he would solve that problem of a Maori track to the east coast, and would not follow the line of a contractor who may have run to a precipice at a point where the contract was ceasing to bo profitable ; and if the Commissioner would open up the easiest route of all —the Patea liver as a natural highway to the interior, the people on this coast would he well content with his exercise of the largo powers vested in the West Coast Land Commissioner,