Sir Julius Vogel

Poverty Bay Standard, Volume IX, Issue 952, 11 June 1881, Page 3

Sir Julius Vogel

On New Zealand & Direct Steam Communication. [SPECIAL TO THE “STANDARD.”] [By Telegraph]. Sib Julius Vogel writes to Mr Oswald Curtis, of Nelson, to say that as New Zealand, in common with all other countries, is suffering from depression, the Government, instead of recognising its temporary character, was seized with panic, and the course adopted was hasty. Difficulties were magnified so as to produce distrust which might have wrecked every financial institution, and every man of means. In the colony the falling off of revenue should have been replaced by reinstating the tea and sugar duties, but the Property Tax at such a time was dolefully inexpedient, and was the main cause of the depression. A great mistake was made in spending the five million loan too quickly, and arrangements should have been made for extending existing contracts. By its stupid fears the Government was fatally discouraging thousands of farmers —with means, experience and knowledge, who would have made the 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 they make up their minds to go to a country whose governmental rule befouled it with such gloomy prognostications ? All experience shows that New Zealand was justified in its railway policy. (He then quotes what had been done in America, and how railway stocks had gone up in two years). No sensible persons can study the history of railways in various countries, and say New Zealand has the smallest reason to fear its railway policy, or halt in carrying it to a rational conclusion. Mistakes there have been ; one being in not capitalising the interest during railway construction ; but it would be as reasonable to cut off one’s finger because of a little pain, as to bring to an end the railway system of New Zealand, because of a liitle difficulty in the way of financing. In deep sorrow he notices that the colony is being virtually deprived of railways, which is going back to 1868, when the Government devoted themselves to attending to Native disturbances, instead of to colonising operations. He ,at once disclaims all sympathy with the idea of the Government parting with railwnys, or making forced sales of land, or permitting continued stagnation of railways unfinished, and land unsettled.

Sir Julius then gives his idea of securing proper railway administration. The management of them should be absolutely, and entirely free from political influence, and be vested in Commissioners, one nominated by the Government, and two elected by members of each Island, not for each Island to perform the duties of a Board, but for the purpose of borrowing money to be associated in one corporate body. They should have judgment to know how much of present profit it would be wise to sacrifice to the object of developing railways. The Commissioners should recommend to Parliament additional railways, with this exception that the railway policy was based on a bargain which should be held sacred ; that there should be two trunk lines bringing into intercommunication, Wellington, Napier, Wanganui, New Plymouth, and Auckland in North Island, and Nelson, Hokitika, Blenheim, Dunedin, Picton, Christchurch, Timaru, Oamaru, Milton, 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 to Commissioners, who would be poor creatures if they were not able to give a proper heed to the question of their future development. The management in each Island should be quite distinct, for it will be an ambitious enough design to make an identity of a system in each Island, without insisting on some 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. As regards borrowing, a limit should be set to the indebtedness to be charged to the Consolidated revenue for railway purposes. The revenue ought to be recouped the amount paid for interest during the construction of railways • and in the next Colonial loans, such amount might be provided to relieve floating indebtedness. Ten millions already spent on railways, have brought into existence an estate of sufficient value to remain for future primary security for further borrowing, to complete the railway system ; borrowing of the Commissioners should be authorised by Act of Colonial Parliament, as the borrowing of companies are in England; only that their acts should be public, and not private ones. These railway loans should constitute a new era; there should be a first security on net railway receipts. It might be urged that railways have already been assigned as security for existing debts, and so this would be a departure from existing obligations ; but I do not think so, as fresh liabilities incurred are merely for purpose of perfecting, and extending the system, with the view of enlarging results, which results go in consolidated revenue, to surmount the difficulty of railways having been included in consolidated revenue. In the Acts relating to loans, provision should be inserted that security be given over railway receipts, but they should not prejudice claims of consolidated revenue to any part of the receipts required to satisfy liabilities. On the other hand, to complete the security, railway loans must be guaranteed by the colony. One great advantage of this would be that all the loans would be Government loans, so far as security is concerned, they would not be in that sense which so often injures New Zealand loans. They would not be a direct part of the public debt to be quoted as such. Two other great advantages would accrue : First, opportunity would be gained of converting the present public debt, and saving immensely our yearly costs ; and, secondly, railway loans would be made to suit the circumstances they have to serve. Supposing arrangements were made for clearing off the present floating debt, New Zealand should not require to come into the money market again for years. Its railway extension otherwise provided for ; and its liabilities merged in its public debt, it should start fair, and within its income, except perhaps occasional borrowing for some great public works, other than railways. By judicious construction, the present burden of the public debt can bi? greatly lightened, and especially if railway loans in future be severed from the public debt. Twenty years hence New Zealand railways would be worth more than the whole of the public railways. A Government which divested the Colony of the contingent profits derivable from keeping railways for the benefit of the State would deserve to be hanged. Scarcely less should be the punishment of a Government which sacrificed public lands, which railways make every year more valuable, and again, only scarcely less should be the punishment of a Government that had not resources sufficient to continue with intelligence, the prosecution of a railway system to a complete condition. The Commissioners should obtain funds necessary for railway extension. After the Act conferring their powers was passed, it might be that the railway loans should oome within the category of loans, the Government undertake not to float, but as advances to be obtained on debentures with guarantees not to float them for a prescribed time.

Referring to a steam service Mr Vogel says that Mr Macandrew is a hundred times right in his anticipations of the benefit fend would reap from a direct service of large, first class steamers. Ido believe, he says, that the advantages to the colony cannot be exaggerated Such a line would afford to New Zealand the benefits from which it is now entirely shut out. To have no direct line of steamers, is almost to proclaim the colony uncivilized ; and to shut it out from a most desirable immigration. Whatever subsidy is required, it is unwise of the colony to refuse it. In the name of the Government of New Zealand I urge, do not let local squabbles stand in the way of so essential a boon to the whole colony.