INDUSTRIAL DEVELOPMENT.

Temuka Leader, Issue 1606, 12 July 1887, Page 3

INDUSTRIAL DEVELOPMENT.

TO THE ELECTORS OF GLADSTONE, THE LOST MILLIONS. I have now shown you that if our exports do not realise a sufficient sum to pay for both the interest and the goods we import we must find the gold and send it to England, and as we have only £2,000,000 of gold in New Zealand it is impossible for us to do it. • Before proceeding further it would be as well perhaps to show how we have been paying this money in the past. Our Public Works policy commenced in 1871, but the statistics in my possession do not go further back than 1873, I will- now show you how we have paid this amount since 1873, from the return of the Banks as published in the New Zealand statistics. The following table shows the variations in our public debt, and the coin in our Banks since that date:—

Year. Coin in Banks. Public Debt,

You will please observe that since 1873 we increased the National debt by £26,644,617, and to this we must add the other moneys we borrowed, which will bring it up to a total of at least £40,000,000: Observo also that during that time we increased the amount of coin in the Banks by £901,638. Now, if you borrowed £40,000,000 of gold in England, would you not think that the gold would come to New Zealand ? I have no doubt many would, but the Bank returns prove that it never came into the colony. If the gold came into the colony it would be in the Banks; there is no other place to put it, but their returns show that it never came in, and therefore the question arises : Where did these

£40,000,000 go tcs The following return of imports and exports will show you where some of the money went: — Year. Exports. Imports,

£84,397,737 £106,729,694 From this you will see that over 22 millions of the gold we borrowed in England has gone to pay for the goods we imported, and the balance has gone to pay interest, absentees incomes, Agent-General’s _ establishment, etc., etc. Do not think it has been spent on making railways. If it had this is how it would hav e worked: The workmen would havp , received tkt gold; they w 0 144 a Te

paid it to th" tradespeople, and the tradespeople would have paid it into Lii.. Banks, and there it would li.i o been now. But piich is not the a-c Our railways and other public works were made with paper money, and the borrowed gold was spent in England in buying goods, etc. The way the oracle is worked is this: The money is borrowed and placed to the credit of the Bank in the Clearing House Department of the Bank of England. There it remains, and paper money does the work in this colony. For instance : A ships £IO,OOO of wool, his agent in England obtains the money for it, and that money is placed to his credit in the London branch of his Bank. As soon as that is done A begins to draw cheques in the colony, but the gold has not arrived. Nothing occurs only that £IO,OOO iB placed to A's credit in his banker's books. B buys £IO,OOO worth of goods in England, and these are paid for with A.'s £IO,OOO, and _ B's _ account is debited with it in this colony. Thus the gold does not move; it remains in England, we only get goods for it, and we have to do our business with paper money. About 23 millions of this money was spent in paying for goods; about £2,000,000 on immigration, and the" balance must h»ve gone to the Agent- General's establishment; to pay interest on borrowed money, the incomes payable to absentees, and the dividends of shareholders, etc. If it had not gone that way it]would now be to our credit in London; it could not sink into the ground; somebody would have it; but by all accounts no one has it, and therefore it must be gone. "We have therefore been paying for imported goods with borrowed money. That is where the trouble arises. If

mr exports had been sufficient to pay for our imports we should have been right, but I find that since the beginning of the colony we have imported £43,000,000 worth more than we exported, and, believe me, that by the time our children’s children have paid the last farthing of the interest and principal the goods will he pretty dear. Goods bought with exports may be cheap; they are always cheap if it would cost more to produce them locally; but goods bought with borrowed money will prove expensive in the end. Dean Swift advised the Irish to “burn everything English except coal.” We ought to burn everything foreign except coal, and endeavor to develop our own resources. We have borrowed all these millions, and the crushing weight of interest we have to pay on them now is sucking the life-blood of the colony, and draining away the fruits of our labor at the rate of £4,000,000 a year. This is what our professional politicians have brought upon us. We have paid Major Atkinson perhaps £20,000 to get us into this position, and yet such is his haste to get back into office that sooner than wait a few months longer he has put the colony to the expense of two sessions this year. Sir Julius Vogel has had nothing to do with borrowing from 1876 to 1884, and it is scandalous to throw all the blame on his shoulders. THE FINANCIAL POSITION. It is not my intention to stand up for Sir Julius Vogel. He appears to me to treat our position too cavalierly altogether. He tells us that after paying our debts we have a surplus of 128 millions, and that everything is right. I tell him that according to my calculations, based on his figures, we have a surplus of 158 millions, and that everything is wrong. The debt which one colonist owes to another is no debt at all when the Colony as a whole is taken into consideration. Our foreign debt alone need trouble us. and that, too, would not be so serious only that the money has not been reproductively spent, and that consequently we are not making interest on the capital invested. If we were our exports would be 12 millions instead of 6£ or 7 millions as they are at present. That is the test of it, and not such nonsensical tests as those adduced some time ago by Major Atkinson, who wanted to prove that our money had been reproductively spent because the cost of haulage of goods was cheapened. Now we shall be reduced to this position —We shall be worth 50s in the £ and yet we shall not be able to pay our way. We shall have assets, but these assets are not what we want. What we require is gold, and that we have not. We cannot take a farm or a warehouse on our backs and land it amongst the English money-lenders. They hold the most of our deeds already, but if they were to get any more of them it would mean further borrowing, which would only sink us deeper into the mire. It comes to this, therefore, that unless our exports are sufficient to pay our way we must become bankrupt, and from all appearances there is not the least hope of our exports reaching 10 or 12 millions for many years to come. Let me put the matter in this way: Suppose a farmer has to pay £IOO a year in interest, and he has to buy £2OO worth of goods, while he only sells £2OO of the produce of his land ; he is therefore going £IOO a year to the bad and must become bankrupt. The only way he can save himself is by buying less end selling more. That is the exact position of the Colony. J M. Twomet.

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 1887 2.2J2.911 37,558,553

1873 5,477,970 6,464,687 1874 5,152,143 8,121,812 1875 5,475,844 8,029,172 1876 5,488,901 6,905,171 1877 6,078,484 6,973,418 1878 5,780,508 8,755,063 1879 5,563,455 8,374,585 1880 6,102,400 6,162,011 1881 5,762,250 7,457,045 1882 6,253,350 8,609,270 1883 6,855,244 7,974,038 1884 6,942,486 7,663,888 1885 6,591.911 7,479,921 1886 6,672,791 6,759,681