Sir Julius Vogel ON THE LATE DEPRESSION.

Patea Mail, 14 June 1881, Page 3

Sir Julius Vogel ON THE LATE DEPRESSION.

On account of a rumour which appeared in the Colonial press some months ago to the effect that Sir Julius Vogel was about to form a company to purchase the New Zealand Railways, a Nelson M.H.R. wrote to ask if it was true. A reply has been received and published in the local journal, and has been summarised by a Nelson writer as follows : Sir Julius Vogel first speculates on the foundation for the RUMOK in the press, and says there were only two ways in which it could have derived the information. First, he wrote some time ago to a member of the Government that he intended to suggest a plan by which the stoppage of railway construction might be averted, and said he would write his ideas to Mr Richardson, of whose administrative ability he speaks in the highest terms ; but, on learning that the Government were dead against colonising work, he did not write, because as AgentGeneral he thought it would be opposing his employers, and therefore disloyal. Subsequently he telegraphed to the Government that he could arrange for converting colonial stocks on profitable terms, and for providing funds to take up unnegotiated Treasury bills. Either of them might have leaked out, and ultimately assumed the distorted form in which the press disseminated them. Sir Julius Vogel then proceeds to say New Zealand in common with all other countries and colonies, was SUFFERING FROM TEMPORARY DEPRESSION, and the Government, instead of recognising its temporary character, was seized with a panic, and, by the course adopted, made matters very serious. They magnified the difficulties so as to nearly produce a distrust which might have wrecked every financial institution and every man of means in the colony. THE FALLING-OF IN THE REVENUE should have been replaced by reinstating the tea and sugar duties, but the property tax at such a time was dolefully inexpedient, because it depreciated the value of property, which was the main cause of the depression, and it was obviously unwise to still further reduce it. A great mistake was made in spending the five million loan too quickly, and arrangements should have been made forex* tending the execution of existing contracts over an increased period. By its pusillanimous fears, the Government fatally DISCOURAGED THOUSANDS OF FARMERS WITH MEANS, experience, and knowledge, which would have made them most valuable settlers, from emigrating to New Zealand. Half a dozen ship loads of such men were prepared to go, and would have set the colony on its legs, but how could the} make up their minds to go to a country whose rulers befouled it with such gloomy prognostications. All experience showed that NEW ZEALAND WAS JUSTIFIED IN ITS RAILWAY POLICY. Sir Julius Vogel quotes what has been done in America, and how railway stock has gone up in two years. No sensible person, he argues, can study the history of railways in various countries and say New Zealand has the smallest reason to fear for its railway policy, or to halt in carrying it to the natural conclusion. Mistakes there have been—one being in not capitalising the interest during their construction—but it would be as reasonable to cut off a finger because of a little ache, as to bring to an end the railway system of New Zealand because of a little difficult}’ in the way of financing. In deep sorrow he notices the COLONY IS BEING VIRTUALLY DEPRIVED OF ITS RAILWAYS, which is going back to the policy of 1868, when the Government devoted themselves to attending to the native disturbances instead of to colonising operations. He at once disclaims all sympathy with the idea of the Government parting with its railways, making forced sales of land, or permitting continued stagnation of railways unfinished and lands unsettled. Sir Julius then gives his ideas of securing PROPER RAILWAY ADMINISTRATION. The management of them, he says, should be absolutely and entirely free from political influence, and be vested in Commissioners, one nominated by the Government and two elected by the representatives of each island—to perform the duties of a board for each island, but for the purpose of borrowing money, to be associated in one corporate body. These should have the judgment to know how much of pre-

sent profit it would bo wise to sacrifice to the object of developing tin- railways, and tbe Commissioners should recommend to Parliament additional railways. With this exception, the railway policy was based on a bargain, which should be held sacred, that

THERE SHOULD BE TWO TRUNK LINES, bringing into inter-communication Wellington, Napier, Wanganui, New Plymouth, and Auckland, in the North ; and Nelson, Hok’tika, Blenheim, Picton, Christchurch, Timaru, Onmaru, Dunedin, Kingston, and Invercargill, in the South Island. To ignore this compact is to make a united community impossible. Granted these lines, the rest should be left lo the Commissioners, who would be poor creatures if they were not able to give proper hoed to the question of future development. The MANAGEMENT IN EACH ISLAND SHOULD BE QUITE DISTINCT ; for it will be an ambitious enough design to make the identity of the system in each island, without insisting on the s une identity for both. The Commissioners might be made use of for future borrowing, and the absurdity of placing railway servants on the estimates as civil servants be dispensed with. IN REGARD TO BORROWING a limit should be set on (he indebtedness to be charged to the consolidated revenue for railway purposes. The revenue ought to be recouped the amount paid for interest daring the construction of a railway, and in the next colonial loan such an amount might be provided to relieve the floating indebtedness, and to bo added to that of railways. The ten millions already spent on RAILWAYS HAVE BROUGHT INTO EXISTENCE an estate sufficiently valuable to remain for the future the primary security for the further borrowing to complete the railway system, with the exception of putting apart certain land as railway estate. The borrowing of the commissioners should be authorised by Act of the colonial Parliament, as the borrowing of companies is in England, only the Acts should be public not private ones. These RAILWAY LOANS SHOULD CONSTITUTE A NEW ERA, and there should be a first security on the net railway receipts. It might be urged that the railways have already been assigned as security for existing debts, and so this would be a departure from an existing obligation ; but be docs not think so, as the fresh liabilities incurred are merely for the purpose of perfecting and •standing that system with the view of enlarging the ultimate results, which results go to the consolidated revenue. To surmount the technical difficulty of the railways having been included in the consolidated revenue, in Acts relating to loans provision should be inserted that the security given over the railway receipts should not prejudice the claim of the consolidated revenue to any part of tiie receipts required to satisfy the Abilities ; on the other hand, to complete (he-security the RAILWAY LOANS MUST BE GUARANTEED BY THE COLONY. One great advantage of this would be that, although the loans would be Government loans, so far as the security is concerned, they would not be in that sense, which so often damages New Zealand loans—they would not bo a direct part of the public debt, to be quoted as suchTwo great advantages would accrue. The first opportunity would be gained of converting the present public debt, and of

SAVING IMMENSELY ON THE YEARLY COST : secondly, the railway loans would be made to suit the circumstances they have to serve. Supposing arrangements are made for clearing off the present floating debt, New Zealand should not require to come into the market for years to come, its railway extension being otherwise provided for, its liabilities being merged in its public debt, and it should start fair and live within its income, except, perhaps, an occasional borrowing for some great public works other than railways. By judicious conversion, the present burden of public debt can be greatly lightened, and especially if railway loans in future be disassociated from the public debt. Twenty years hence New Zealand

RAILWAYS SHOULD BE WORTH MORE than the whole of the public and railway debts, as anyone must see who is not a child in intelligence of railway history. “ The Government,” he remarks, “ which divested the colony of the contingent profits derivable from keeping the railways for the benefit of the State,

WOULD DESERVE TO BE HANGED ; scarcely less should be the punishment of

a Government which sacrificed the public lands, which through-rail ways make every year more valuable ; and again, only scarcely less should be tiie punishment of a Government that had not resource sufficient to continue with intelligence the prosecution of the railway system from ils present incomplete to a complete condition.” The commissioners could obtain the funds necessary for railway extension the day after the Act conferring the powers was passed. It might be that railway loans come within the category of loans the Government undertook not to float, but even so, advances could bo obtained on the debentures with a guarantee not to float them for a prescribed time. Referring to a STEAM SERVICE WITH ENGLAND, Sir Julius Vogel says “Mr Macandrew is a hundred times right in his anticipation of the benefit New Zealand would reap from a direct service of large first-class steamers. I do not believe the advantages to the colony can be exaggerated. Such a line would afford to N T ew Zealand benefits from which it is now shut out. To have a direct line of steamer is almost to proclaim the colony uncivilised, and to shut it out from the most desirable immigration. Whatever the subsidy required, it is extravagance for the colony' to refuse it. As for the port, in the name of New Zealand I nrge, do not let local squabbles stand in the way of an essential boon to the whole colony.”