The Temuka Leader TUESDAY, AUGUST 17, 1886. EXTRAORDINARY REVELATIONS.

Temuka Leader, Issue 1543, 17 August 1886, Page 2

The Temuka Leader TUESDAY, AUGUST 17, 1886. EXTRAORDINARY REVELATIONS.

The following letter addressed to Uie members of Parliament has appeared in the New Zealand Times and Mail, of Wellington : TO THE EDITOR. Sir, — I wonder do our members of Parliament ever think ? And, if so, do they think of anything but themselves ? Mr Bryce is reported to have said there were not three members in the House who understood the financial position of the Colony, and, judging from hia speech, i doubt that be is one of them. With your permission I will lay a few facts before them to reflect upon. Mr Rolleston has said that our public and private indebtedness amounts to £70,000,000. Mr Reynolds has placed it at £73,000,000, and Mr Turnbull at £84,000,000. I w ill strike an average of the three calculations and make it £75,000,000. In his Financial Statement of 1884, Sir Julius Vogel said we pay interest at the rate of 5.33 per cent-for the public debt, and to put the private debt at 6£ is, 1 think, within the mark. To take £75,000,000 at 6 per cent cannot, therefore, be too high, and at this rate I find we have to pay £4,500,000 in interest annually. The money has been borrowed in England, and consequently this £4,500,000 must leave the Colony annually. In addition to this we have to find money for our imports, for dividends payable to the foreign shareholders of all our monetary institutions, for the incomes payable to absent colonists, and also cash taken away by tourists, emigrants, and other people leaving the Colony. To meet those demands we have only our exports, and whatever tourists, immigrants, and re-mittance-men bring in. Mr Turnbull estimated that we receive £500,000 a year through tourists, remittance-men, etc., and I will accept it as correct. Let me -now prepare a balance-sheet:— receipts, £ Exports ... ... ... 7,000,000 Remittances, immigrants, and tourists’ money ... 500,000 Total 7,500,000 EXPENDITURE. Imports ... ... ... 7,000,000 Interest ... ... t ••• 4,500,000 Dividends, absentees, tourists, etc 1,000,000 Total ... ... ...12,500,000 This shows we are going to the bad at the rate of £5,000,000 a year. To provide against exaggerations—although I have taken the figures of members of Parliament —I will throw off £1,000,000, which is equal to interest on £20,000,000. I have also made our exports equal to our imports, which amounts to giving the Colony an advantage of another half million. I have therefore thrown off £1,500,000 in favor of the Colony, and yet there is the enormous sum of £4,000,000 a year to be made up. Now, where are wo to get this £4,000,000 a year from 1 I say somebody must borrow it. We have borrowed it in the past, as proved by our back returns. The following returns show the variations in the amount of coin in our banks, and in our public debt from 1873 to 1883 : Year, Coin in Banks, Public Debt,

It will be seen from this that during the ten years we borrowed over £20,000,000 public money, and there can

be very lit’le doubt but that tho amount of our private borrowing, inducting local bodies, equalled, if it did not exceed, that sum during tho same time. Then I find that while we bonowed dniiog th. so 10 years £40,000,000, the amount of money in the hanks was increased by less than half a million. Where did the balance go ? The answer i« obvious. It went to pay the £4,000,000 above referred to. Mark how suitably it fits in: four millions a year for ten years, 40 millions ; just tho amount, that is missing. If I could prove that during these ten years we borrowed 20 millions privately my argument would have been as “ unanswerable” ns Sir Joseph Porter’s “ official utterances,” but I think there cannot be the slightest doubt nbeut it. If the money came into the Colony*it would have been in the banks ; there is no other place in which it could be put, and the fact that it does not appear in their returns proves that it never came to the Colony, and that it was spent in paying the annual balance against us in London. I have, I think, thus proved that we have been paying our debit balance annually out of borrowed .money, and it appears to me only reasonable to conclude that we must continue to do so unless we adopt means of equalising our receipts and expenditure. And, what is worse, the more we borrow the deeper we sink into the mire. Every million we borrow mus) add £50,000 a year to the amount of money we have to send out of the Colony. I ask our representatives in Parliament now', Are they going to continue this until our credit is stopped] Would it not be better to change at once, and try to equalise our receipts and expenditure] The first tiling Government ought to do is to borrow sufficient to pay off all the English mortgages on land, and establish in connection therewith a National Bank, in this way the difference between the rate at which the Government could get the money, and the rate at which private people have borrowed it, would be saved to the Colonv. This has been estimated at £1,000,000 a year, but I will not vouch for the accuracy of the statement further than that I believe it to be pretty near the truth. About £1,000,000 might be secured to tho Colony in that way, but the increase in our exports consequent on farmers having money would without doubt amount to another million, provided more energetic steps were taken to settle people on the land. Gy a National Bank, therefore, between £1,500,000 and £2,000,000 would be secured to the Colony. But this would not do ; we should still bo going to the bad. We must decrease our imports, and that we can do only by putting on protective duties. Every article that cau be produced in the Colony ought to bo protected to an extent that would enable home manufacturers to gain a complete monopoly of the market. I have seen it stated I think in a lecture delivered in Dunedin by Mr Blair, C.E. that £4,000,000 worth of goods we import could be easily made in the Colony if reasonable protection were given. Then, if this could be done, we ought to take immediate steps to protect such industries. I refuse lo discuss this from a Freetraclo v. Protection point of view. 1 do not make the proposal on the ground that Protection is sound in principle, I only suggest it as a means of averting a financial crash, followed by repudiation. Whore is the fool who would not resort to protection to avoid repudiation ] I know some of our representatives suffer severely from the Freetrade rabies ; they are pretty nearly as far gone as Sam Weller’s friend, who killed himself to prove that “ crumpets were wholesome.” But surely the bias given to their minds by reading works on political economy written for and suitable to England, has not overclouded their understanding to ao extent that they would let the Colony go to ruin to prove to the wor'd that Freetrade was sound in principle. The political economy that would suit England might not prove suitable to this Colony. Here, so far as financial matters are concerned, at any rate, the conditions are the reverse of what they are in England. The latter country has lent to the whole world, and a constant stream of gold .is flowing into her ; on the other hand New Zealand has borrowed madly, and every penuy she can borrow or make is being drained . away. How anyone who is not an arrant fool could be induced to apaply the same economic principles in both countries is incomprehensible. The conditions are reversed, and llie economic principles ought lo be reversed accordingly. I have shown on the authority of statements made by members of Parliament that our total debt is £75,000,000, I have shown that we lose on every year’s transactions £4,000,000 and that hitherto all this has been paid with borrowed money. If my statements are accurate, any reasonable being must couc'ude that we are rapidly nearing tho fatal moment, when tho crash must come. I appeal to our representatives to think over the matter and to take decisive steps before it is too late. If they will not start a national bank now, they will do so when their credit is stopped. Then they will have no gold to back, up their notes, and they will fall into disrepute, whereas, if they started them with gold at their back they would circulate at par. America resorted to paper money and protection when she found no one would lend her a penny. Her paper money was at a tremendous discount. IE we wait until our credit is stopped also, our piper money will bo similarly treated. 1 have read a speech by one of onr. representatives, in which ho glibly treated of the evil effects of paper money in France, but he neglected to mention that France adopted paper money after her gold had been drained away. If it became known that our banks had no gold wo would not take their paper money, but so long as we are assured they have the gold, we never ask any more questions. If we were assured the Government could give us gold if we wanted it, we would never bother them for it, but let it be once known that our credit is stopped—and then. But I have said enough, if anything can be of any use.—l am, &c,, J. M. Twomey. Temuka, July 24, 1886.

This appeared on the 12th ipaiant, and on the 14th Mr Twomey received a letter from one of the members speaking approvingly of it. If the permission of the writer can be obtained the letter will appear in a future issue. A similar letter has been refused insertion by the Otago Daily Times, but one to the same eff-ot has been inserted

in the Soutlilaal News ami South lander, and several letters have appeared in rep ! y to it there. Del us hope that it will resist in making people think, and (hat a policy of self-preserva-!ion will bn the cry at next election.

£ £ 1873 1,311,273 10,913,936 1876 1,458,019 18,678,111 1879 1,744,374 23,958,311 1882 1,735,746 30,235,711 1883 1,748,330 31,385,411