THE -FINANCIAL POSITION OF SOUTHLAND.

Southland Times, Volume I, Issue 47, 17 September 1864, Page 2

THE -FINANCIAL POSITION OF SOUTHLAND.

' (From the Sotjthia2o> Times, August 20.) If the last Session of the Provincial Council was void of results, as far as the adoption and maturing of any financial plan by which the Province could be at -once relieved from its embarrassments', it was not .owing to the absence of financial ability on tlie part of the members composing -the House, but rather to the impossibility of entrusting the workingout of the details of any scheme to persons irresponsible to the Council. Mr. Chalmers entered at considerable length into, the details of a plan which was both intelligible and feasible, and even offered to undertake to" carry it through the Council as a private member, should the Superintendent choose vo entrust { it to x him.' It was allowed, to fall, through, and although the basis of it has "been disturbed by the decision of the General Grovernment recently declared, that no further Provincial loans will be sanctioned by the Grovernment, unless previously endorsed by the General Assembly, yet it gives so clear an exposition of our present financial position, our ability to meet past liabilities, and our condition to incur without any danger further ones, that we have no hesitation in giving publicity to it, though, for the present, it has become impossible to practically test its merits. Mr. CualMERS proposed raising a loan for £150,000, terminable on the 30th of September, 1872, which, he calculated, would cover all our liabilities, and enable us to finish both railways. He then proceeded to demonstrate how we could pay interest and sinking fund on our present loans, and, at the same time, clear off the proposed new one by calling in £20,000 a-year. He estimated our annual charge for loans hitherto sanctioned under the head of " constants " as follows : — 6 per cent, interest, Province's share of Ifew Zealand Company's debt £1,080 S per cent, interest, and sinking fund, Bluff Harbor and Invuretirgill Railway (loans, 1 and 2, £180,000) 1 1,400 8 per cent, loans 1 and 2, Great Northern Kaihroy, £110,000 S.SOO Total per annum £24,250 Proposed new loan, terminable on 30th September, 1572 : — £ £ £ 150,000 Interest to 30th Sept., ' 1865, at 6 per cent.... 0,000 20,000 Amount called in for 1564-5 20,000 29,000 130,000 Interest to 30th Sept., ISG6, at 6 per cent., on £130,000 7,800 20,000 Amount called in for 1565-6 20,000 _ 27,500 110.000 Interest to 30th Sept., ISO 7, at G per cent., on £110,000 0,600 20,000 Amount called in for 1566-7 20,000 26,600 And so on until the 30th September. 1872 , when the sum to be liquidated stands — £10,000 Interest to 30th Sept., 1572. at 6 per cent., on £10,000 £600 Amount called in 10,000 £10,600 Thus, in eight years from the first of October next, the whole debt would be repaid; and by calling in £20.000 a year xe°"ularl m y. at an aetiAfil cost for interest of £35,i00, instead of £72.000, if paid oil' in a lump sum at the expiration of that period. The sums required annually to meet these payments (including " constants") would* therefore stand thus ; — October, 1565 £53,280 October, 1566 52.080 October, 1567 50,880 October. IS6S 49,680 October, 1869 45,450 October, 1870 47.280 October, IS7I 46,080 October, 1872 3-i.SSO j And after that the " constants " only, of £24,250. Mr. Chalmers, in proceeding to provide a revenue to meet these demands, took as a basis a less sum per quarter than that actually obtained during the one ending 30th June last (one of more than ordinary depression, viz. — £27,211), and^ assumed that the revenue derivable from all sources would for the next eight years remain at £25,000 per quarter, "or £100.000 per annum. He struck an average of £47 <S3O per annum to meet all demands, leaving £52,170 per annum wherewith to carry on the G-overnraent of the Province. This Mr. CHALiiEKS estimated under the following heads at — Police .' £10,000 Pilot Service 7.000 Gaol 3,000 Hospital 2,000 Other departments 12,000 £34,000 leaving £18.000 a-year for Eoads and Public Works. To * secure the absolute payment of the interest, sinking fund, etc., due annually, Mr. Chaxmees proposed to hypothecate the whole of our revenues to the G-eneral Government, the Provincial Treasurer paying over to the Colonial Sub-Trea3urer monthly, all sum 3 accruing from Provincial sources. The Sub-Trea-surer, after deducting the interest and redemption fund, to hand over quarterly the balance to the Provincial Treasurer for current expenses. Such was Mr. Chalitees' proposition, and it bears on the face of it every element of success. It may be questioned whether a loan at a short date is as Likely to be marketable as one for a longer period ; but it must be borne in mind that the object at the time of Mr.- Chaxhebs' proposition was to disabuse the mind of the G-eneral G-overnment of any intention on our part to continue the reckless expenditure of the past. A proposed loan, terminable at a long period, would have failed of j effecting 0 this object, whereas Mr. CejLLMEE3' plan speaks clearly enough of a determination to alter the course hitherto pxusued, , and practise a rigid economy; In the estimate of our revenue for the next, eight 'jearß, we think Mr. Csu&kEßß is Vender, not over the mark

The most despondent will believe that the revenue for the next eight years will be in excess of £100,000 a-year. As a rule, there is no such thing in the history of. Colonies as standing still. If there is not progression, there is retrogression, and the latter, with the position Southland has attained, we have no right to expect. Instead, therefore, of a balance of only £18,000 a-year to expend on roads and ordinary public works, we might look for a much larger sum, which would enable us not only to redeem "mis-spent moments past," but, with experience gained, to carry on works of real public utility commensurate with the requirement of the Province, as it steadily progress v-s to its allotted destiny. Cautious in not over-estimating our probable revenue, Mr. Chalmers has been equally careful not to under-estimate our expenditure and liabilities. His estimate for expenses of Grovernment, £34,000, however warranted by the past, is considerably over what, with rigid economy, we have a right to expect they will amount to for the future. The item (£*10,000) for Police, for instance, is too large according to the amended estimates passed at the last session of the Council. It was reduced to £5,932 4s. Sd., about £4,ooo less than it was for the year 1863 ; and we have no doubt that, under the able management of the Commissioner, Mr. Weldon, it can be kept at that figure without the efficiency of the force being impaired. Mr. CrAir.rERS has also over-estimated the Harbor Department or Pilot Service and Gaol. The latter, according to the last estimates, is placed at £2,560 per annum, and the former at £4,404, instead of £7,000. Even the estimates, as last passed, are capable ofreductionmthe other departments, not in the salaries, which are low enough, but by amalgamating the offices, and thus reducing the number of officials. Mr. Chalmers believes that the railway debentures will sell only at par, and that the works themselves, for the next eight years, will do no more than pay tho working expenses. As regards the first, we have no doubt that, with the Colonial guarantee, the debentures will sell at a premium of five per cent. Had the first loan of £140,000 been placed in the market when it ought to have been, we know it could have been floated at from 6 to 7 per cent, premium, without the guarantee. As regards the railways paying more than their working expenses, whatever they may do for the tii\st year, or even two, we are confident, that after that they will add very considerably to our revenue. All experience tends to prove that even where there is little or no traffic, a railway creates one ; and in no case that has come to our knowledge has a cheaply constructed railway tailed to pay handsomely, and the two Southland lines are amongst the cheapest in the world. On the whole, if Mr. Chalmers 1 has erred it is on the safe side ; lor even supposing we only obtained a revenue of £LUO,OOO a-year, 'we feel sure that after paving all charges of interest, Government, etc., we should have a considerably larger balance for public works than the £18,000 Mr. Chalmers anticipates.