The Southland Times. FRIDAY, NOVEMBER 29, 1872.

Southland Times, Issue 1669, 29 November 1872, Page 2

The Southland Times. FRIDAY, NOVEMBER 29, 1872.

The Northern Otago District Public Works Loan Act, passed last session of Assembly, is a measure which has hitherto received little notice from the general public. It may be questioned \ whether many of those who are usually well informed on political matters are even aware of the existence of such a measure, much leas the object which it is intended to serve. An exception may no doubt be made in favor of the inhabitants of the district affected by its provisions, most of whom are probably more or less aware of their nature, and, it may be assumed, regard them with approva 1 . The inhabitants of the northern district of Otago have long complained that their interests have been neglected by the Provincial Council in the expenditure of I the public funds. The charge indeed has been of late tacitly admitted, but the excuse made by each, successive Executive has been that whatever may have been the shortcomings of previous administrations, the funds were really not now available to meet their demands The great desideratum of that part of the ! Province has long been felt to be secure and commodious harbor accommodation. Nature, bountiful in respect of soil and climate, has denied this additional advantage, and Oamaru, Kakanui, and Moeraki are little better than open roadsteads. But what nature had denied, it was argued, art might supply, if the necessary funds could only be obtained. As it was out of the question to expect these funds to be furnished by the Provincial revenues, the natural and simple expedient of borrowing was of course suggested. But here arose a difficulty. Many who might be supposed capable "of forming an intelligent opinion on the matter were by no means agreed as to tbe possibility of constructing some of the most important works in question, however useful they might be, if it proved practicable to make them at all. Those who held this view, and others who might have no particular opinion on that part of the subject, were disposed to see in the principle affirmed by the Legislature, on the occasion of thfe consolidation of the public debt — to wit, that there should be no more borrowing for merely Provincial purposes — an insuperable barrier to the adoption of this expedient. The Province could not borrow the money itself, and for two successive sessions a bill introduced into the Assembly to effect the object, though it passed the House of Bepresentatives, failed to receive the assent of the Legislative Council. This session the promoters of the scheme have been more fortunate, and the Act in question, introduced in the House by Mr MaCA-NDREW, was passed in the Council by a majority of one. The Act provides for the raising of a loan of £70,000, in New Zealand or Australia (not in London) by the Colonial Government, and for its expenditure on certain works named in a schedule, being harbor works at Oaraaru, Kakanui, and Moeraki, some roadmaking, a tramway, and a bridge. The repayment of the loan, capital and interest, is chargeable on the consolidated fund of the Colony, so that it is in every respect a Colonial loan. The Act further holds the Provincial revenue of Otago liable to be charged with the interest and a ten per cent, sinking fund, to recoup the consolidated fund But as the Colonial charges on the Provincial revenue o£ Otago are already somewhat heavy, a further and possibly more tangible security has been taken, by making the interest and sinking fund a first charge on the land revenue of the district, which the special works in question are supposed more particularly to benefit, a tract of country some forty miles by fifty, lying between the Waitaki and the ICakauui ranges. The loan, it will thus be seen, ought to be entirely paid off in ten years. Such are the main facts of the transaction. Now we have not a word to say about the merits of the works to which it is proposed to devote this money. In the absence of special information to the contrary, ifc is but fair to assume that their utility is such as to warrant the outlay proposed. It is more than probable that in that respect they will bear favorable comparison with some, at least, of the undertakings authorised under the Public Works and Immigration scheme. The money may, for anything we know to the contrary, be very well spent. But whether it be so or not, a question of far ' greater moment is suggested by the manner in which it is raised. The loan, as we have pointed out, is a Colonial loan, the debentures are issued by the Colonial Treasurer, and the Colony at large is liable for its repayment. Why then the provision in clause 2 of the Act that the' !

money is to be raised in New Zealand or Australia? Was it felt that the isauo of debentures in London, where they might have boen expected to command more favorable prices, would not be advisable in the present circumstances of the Colony ? It does not seem improbable that some such idea suggested the limitation of the field of operations to these Colonies, and the supposition is further strengthened by the caveat in the last clause of the Act, which declares that nothing therein contained shall be held to prejudice any securities heretofore charged upon the revenues of New Zealand. A wise precaution, no doubt, if the financial world of London will only consent to believe that it is effective. It is childish to suppose that a transaction of the kind will not be as well known in London as if the money had been raised there ; and yet, childish as it may seem, the precaution of raising it in the Colonies can hardly have been adopted for any other reason. The paltry amount of the sum, £70,000, compared with the figures with which late operations in the money market have made us familiar, only makes the matter worse. If such miserable financial tinkering is resorted to, from whatever motives, its effects will soon be visible on the credit of the Colony. "We say nothing now of the obvious consideration that if one district is allowed such a concession, there is nothing in point of principle to prevent its being extended to others, au<? the whole landed estate of the ',Colony might soon be covered, in a similar manner, by mortgages to secure loans raised for local works. There is no reason that we can see why there should not &c a Southern Districts Loan, if the Northern Districts Loan is defensible. It requires no great astuteness to see in this paltry transaction another result of aur wretched system of double government. "When the difficulty of preventing the repetition of such expedients in other places, and the inevitable results of the extension of such a system, are considered, it becomes the duty of every honest politician who regards the future welfare of the Colony as an important trust committed to his charge, to oppose all such expedients to the utmost of his power, no matter how plausible may be the reasons with which they are urged, or how pressing the political necessity they are intended to meet.