The Daily News WEDNESDAY, JULY 15. OUR PUBLIC DEBT.

Taranaki Daily News, Volume LI, Issue 175, 15 July 1908, Page 2

The Daily News WEDNESDAY, JULY 15. OUR PUBLIC DEBT.

"Another million and a-quarter loanhow can the country stand it!" bucii an observation i s by no means uncommon just now. yuiie a number of peo.ple have convinced themselves, wiUiont taking the trouble to examine things very carefully, thai the piling up of me debt is crushing, or is destined to crush, the country. They poiuL out that during the pa»t IT years the gross public j ,debt of the Dominion luw increased by 1 over £27,000,000. It is an argument 'based on fact, certainly, but does the fact retlcct any discredit 011 the country's managers if By what manner of means would those who disbelieve ui flic country's borrowing policy, propose to develop the resources of flic country? It is generally found, indeed, that those who cry loudest against increasing the debt arc most prominent in urging upon the' Government the necessity for spending huge sums in some particular direction. Public works, particularly railways and roads, must be vigorously carried on for some years, and is there one who, at the present stage, contends that revenue solely should be applied to such works? As a matter of fact, during the past seventeen years a sum of no less than six and a-lialf million pounds lias been transferred from revenue to public works, of which total £BOO,OOO was transferred during the year ending 111 March last. Had that gross amount bee» borrowed, our annual interest bill would have been £225,505 greater.

We agree with those who hold the Government should not have made the heavy remissions they did in. customs and other taxation last year—that the country could ha-ve well stood the then taxation; and the money devoted to the Public Works Fund, preventing borrowing to that extent. Still it is satisfactory to know that of the .C2ti,(KM),OOO net increase in the debt during the last 17 years, over £11,000,Otll) lias been spent on public worksrailways, roads, bridges, telegraph extensions, public buildings, etc. Much of this money naturally has been spent in channels that, while not unreproduetive, are not interest-producing. Of nearly twelve millions raised for public works, approximately seven millions have been spent on railways, which are returning the State 3'/ 2 per cent, on the capital cost. Of nearly six millions raised for Land Settlement, every pennv is more than earning interest and is no direct charge on the taxpayer. Nearly three millions sterling lias lieen borrowed and loaned to local bodies at a rate covering the Government's annual liability for interest and principle. Nearly three quarters of a million has been utilised for the purchase of Native Lands, directly interest covering. Half a million invested in New Zealand Consols and another half million in Bank of New Zealand preferred shares cam their own interest. And not the least important, and at the same time equally illustrative of the contention that the great bulk of thepublie debt raised lately is the record of the Advances to Settlers Loans. For this purpose, the Government has.borrowed £3,500,000.

The beneficence of the operations of the Advances to Settlers is amply proved by its splendid fourteen years' record. The amount authorised to be raised for the purposes of the original Act was £3.000.. 000, but though half this amount was r.aised in the following year, the three years originally allowed "for raising the whole loan had to be twice extended. In 1901 the time-limit was removed, and authority was given for the raisin" of another .C 1.000,000. The present limit is .£5,000.000, which Sir .loseph Ward announced in tjie Financial Statement his intention to ask the House to increase to €0,000,000. lie stated, however, at the-same time that it was by no means certain that this addition il million would ne needed. Paradoxical as it may at first sight appear, the department is, of course, able to lend a good deal more than it borrows. By the ;llst March of last year loans' totalling £.5,714,020 had been granted, though the total amount raised for investment was only C3,f>00,000. The difference is accounted for by the fact that the mortgagors of the department are paying oil principal as well as interest in their half-yearly instalments. Paying at the rate of s'/ 3 per cent., of which only 4 1 /. is interest, they repay 1 per ceiit. of the loan in the first year, and the proportion increases with each .payment un til the whole loan has been liquidated in 30 Vi- years.

Thus while, according to tlie round figures of Hie lludgct, £8,000,00(1 has been advanced to settlers altogether, inclusive of £l,-100,000 lent lust year, the animal repayments to the department now reach the handsome total of £BOO,OOO. In ordinary course the total will soon reach £1,000.000 a year, whence the Premier infers that it will shortly be unnecessary to continue borrowing for the purposes of the Act. Indeed, he considers that as soon as the department has been given the proposed power to raise another million, and has invested the whole of the six millions which will then be at its disposal, the annual repayments of princi;i:i! will be large enough to keep pace wij!i ;;ll I In- new applications. About 23,000 settlers have been accommodated with loans averaging £348, yet (lie Minister of Finance can say that "no loss has been made up to (he present time," a matter for all-round congratulation. Hotting money at 4 '/ s per cent, instead «t (it 6 Or 1 per cent, must have represented to many a struggling settler the difference between prosperity and bankruptcy. When the scheme was introduced, C or 7 per cent, was not an uncommon rate for a mortgagor to be paying, even on good security, for a small loan. Where he luul a. sufficient margin 10 offer—i.e., two-fifths instead of onethird—he secured at once the benefit of a reduction of his interest by 1% or 2V 3 per cent., while at the same time lie was ' being induced to save by the necessity! of reducing his principal obligation, every half-year,

That which is true of the operations of the Advances to Settlers Act is, though perhaps in lesser degree, true of the bulk of the borrowings of the last 17 years, in so far as it is a fact that the" increasing debt docs not represent a proportionately Increasing burden on the people. Briefly put, in round figures, of the £2(1,000,000 net increase in the public debt during the past seventeen year*, about £20.000,000 is earning its own interest. Were the public debt scheduled more clearly ami explicitly in flovernmcut returns under various purposes to which it has been applied, or transferred to the Departments in like manner as the Premier believes is expedient in the ease of the Advances to Settlors Department, the actual debt, so far as it is a burden on the Dominion would be shown, while the true position would be more generally understood

The average wage of factory workers last year, according to tbe Labour Department's returns, was J-07 13s, as against £O4 3s in 1000. No wonder Unit capital ia being driven from tht country! The death has occurred at .Nelson of Mr. James Elick, a very old settler. Ue uuue out from England in the ship Indus in 1842, and had resided at Nelson ever since. He was a farmer and a tanner, and is said to have started the u'rst leather manufactory in New Zedland. Air. Blici; leaves a widow, four sons, and four daughters, "There's just as mueli trafficking and jobbing in leases as 111 the freehold," said Mr. Wade, chairman of the fckrliool Commissioners, the other day. An application for a, fvausfer was before the Board, and from the papers it was seen that the transferee would pay £«SO for goodwill ana improvements. Mr. Simpson remarked that men took up leases of Crown lands, and after holding them for a year or eighteen months, and spending perhaps £IOO, would not sell out at less than £SOO or £OOO for improvements.

There is to be no formal Opening of the Alain Trunk line when the members of both branches of the Legislature make the first through journey over it early in August, to attend the celebrations connected with, the American fleet's visit to Auckland. The line will be sufficiently complete to enable a through train to be run, but a good deal more will lave to bo done before the permanent way will be ready for ordinary traffic. Probably everything will be in proper working order by the end of the session, which will provide an excellent opportunity for the celebration Of this important national event.

Reporting to the Minister of Lands on the Kapiti Island bird sanctuary, Mr James Drummond says:—"l was convinced during my visit that the presence of the Maoris will be a menace to the forest and the birds every summer. While I was on the island, a large grasifire swept over the Maori land, and only stopped at Hie edge of the. forest on the Government land. On another occasion a bush Tire might gain a good hold and sweep over the island. New Zealand birds will not live away from the native forest, and if the trees are destroyed the island will be quite valueless as a bird sanctuary. In these circumstances it seems to be advisable to offer the Maoris some inducement to relinquish their rights in respect to the laud they own on Kapiti."

A sawmillcr informed a West Coast paper that the outlook for the sawmilling industry on the Coast was very gloomy, owing to the large importations of Oregon pine. He stated that there were very few orders coming to haul, and most of the mills cutting red pine would have to cease work unless something was done speedily to jirotect the industry. The business people of the .town did not realise the seriousness of the position, otherwise they would be up in arms as a protest. He asserted Unit orders weir placed in Wellington for over 3,300,0UUft of Oregon pine to be delivered within three months. This would seriously all'ect the export from the Coast mills, and practically paralyse tho industry. At last night's meeting of the Taranaki Jockey Club, Mr. Fred. Watson (the chairman) said be had been con-

uected with racing now for a good number of years, and hud owned torses himself. It might be treasonable for him to say he was pleased that he didn't own any He remembered that lie used to get into trouble with old Sergeant Dunn for galloping up and down the Devon street of tile early days. During his racing career he had doubtless been culled some pretty hard miuies, but he hud a clear conscience, although perhaps many people in Auckland would not believe that. This was the end of his eighteenth vear Willi the Tavanaki Jockey Club. The club, like himself, had been called hard names in its time. No doubt there bad been mistakes—but. he was in a position to know that in this case 11n- devil was not quite as black as painted. From his experience -he was convinced tiat the Taranaki .lot-key Club was not nearly -the worst elnb in New Zealand. Doubtless they liad done those things which (hey ought not to have done, and had not done some things that they ought to have done. He was fully convinced that the elnb, with judicious handling, and a fair amount of luck, would yet be made to occupy its proper place as one of the leading clubs in New Zealand.