IS THE COLONY BANKRUPT?

Patea Mail, 20 November 1880, Page 4

IS THE COLONY BANKRUPT?

A London mercantile publication, Wostgarth’s Circular, makes some sensible observations on the financial position of this colony. It says: “There lias been a persistent set against New Zealand, iu exposing all the dark side of, the present case, with hardly if at all any allusion to what may bo said on the other side. Any one who has watched intelligently the large and continuous outlay of borrowed money upon public works, chiefly railway, for some years past, must have foreseen a crisis when all this drew to its close. This crisis opened upon the colony last year, and it was seriously precipitated both by a concurrent very bad harvest, and by the collapse of the City of Glasgow Bank with its large New Zealand land connections, The most prominent consequence was a largo and unprecedented revenue deficiency, amounting to no less than £990,000, caused mainly by the falling off in land sales. But let us turn now to the other side of the picture. The present Government, which is entirely opposed to the Colony’s excessive borrowing, and has now brought it le a close, has at once faced the financial emergency, and by a reduced expenditure and increased taxation has already balanced the estimates of the current year witli a surplus of £-11,000. The Government is about to checkalso the late extensive municipal borrowing. The Colony’s

reviving efforts have been materially helped by the very abundant harvest of the present year. Again, the high price and comparatively scant supply of labor for the Colony’s general purposes for years past, with all this railway making, have held in abeyance many improvements and much progress that could not afford the heavy costs. These will soon have their fair chance, and concurrently the Colony’s productive outcome will be proportionately increased. The reduced money wages are already nearly as effective as before, with the increased supply and cheaper price of necessaries. The rates of money too, which with excessive land speculation have been for some time at 10 to 12 per cent., are now by latest accounts down to 8 percent., thus affording a further chance for real progess. With its network of railways, its genial climate and fertile soil, New Zealand now presents to ns an apparatus of wealtli production which, for a like territorial area, is confessedly not equalled in any part of the Empire. The Colony is in full credit with the many strong banks within its area for any temporary deficiency. The prompt rectification of the finances, even in the first intensity of the crisis, shows that there is power and resource as well as good will. That such a Colony, whether through want of will or want of resource as timid investors may have feared, should make any financial default, even for once, in the mere matter of exact punctuality, is about as unlikely, the Colony may well claim to say, as that the British Government itself should make such default.”