SIR JULIUS VOGEL.

Temuka Leader, Issue 1841, 17 January 1889, Page 3

SIR JULIUS VOGEL.

Mr J. T. Matson, of Christchurch, placed the following letter received by him from Sir Julius Vogel at the disposal of tho Lyttelton Times : “ My Dear Matson,—l am very much obliged to you for your interesting letter and enclosures. I am glad you seem to think so well of the condition of affairs in Victoria. The general impression here appears to be that things ore overdone and inflated, and that there will bo a great reaction. On the other hand the impression seems to be that things will materially improve in New Zealand. Wool, wheat, and meal are at payable prices, and land must recover its value. The fact is, things have been so depressed in New Zealand that for some years past land has not been credited with what should be a large factor of its present value that factor, prospective increase in future value. If a person had debentures beating interest at 4 per cent, with the condition that at the end of some years the interest should be increased to 5 per cent, the value of the debentures would be tho value as regards the present rate of interest they yield plus something for tho increased value when the 5 per cent interest begins. This prospective increase in tho value of the land has not been taken into account in ISew Zealand ; but has, 1 fancy, been too much taken into account io Victoria. As regards this prospective increase in the value of land, I am not relying on a fanciful speculation, but on what seems to me a certainty, because ic depends on a certainty—the increase of population. The bulk of the wheat produced in the colonies is consumed there, but the price is not determined, as it ought to be, by loctl demand. If it were it would be recognised that the farmer, like other persons carrying on business, should receive a fair profit on his operations, But the price is really greatly dependent on wbat can be obtained for the surplus stock, and the larger the surplus the more does tho price obtainable for the surplus determine the price which the local consumers hive to pay. We may, of course, assume that the value of land depends upon the v?lue of its produce, present and prospective, and we have seen as X have shown above, that the value of the produce depends on the two things—the extent of tho surplus »nd the value of that surplus. It is, therefore, logically certain that if there is a tendency to either the surplus becoming less, or tho value of the surplus greater, then the tendency is to an increased value in land. Now there is a great tendency to tho surplus becoming less, as population increases; and that effect is being promoted all over tho world. The extraordinary development of ocean carriage, and the cost £of freight being below the paying point, have given an enormous impetus to grain production all over Ihe world. In my opinion that development has almost reached its full extent, and the rise of freight to a payable price will tend to limit further development. But there comes in also this most important factor—the countries that export grain as they increase in population have less to send away ; even supposing they have not fully developed their capacity of produce, it is quite certain that capacity is not equal to the equivalent of the increased demand consequent on the increase of population. Hence the bed rock of lower values is reached, because we have attained to a production that can not increase correspondingly with the increased population. There isj 1 think, reason to believe that in many cases increased production will give place to diminished production. The inducements of low freights have tended to induce cultivators to abnormally draw on the resources of the land, and a great deal of land must have lost mere or less of its fertility—a strong impression prevails in many quarters that fertilizing may for a time*improve land, at the expense of its ultimate value, Just as an artifioohy pampered individual may, after some years of abnormal strength, become prematurely broken down. All this points to the conclusion I began with ; that the future prospective value of land in New Zeaiand is a factor that should be taken into account in determining its present value. “ It is just the sune here. Land has gone down far below its proper value, and Its prospective increase is quite lost sight of. Soon the various countries that have supplied Great Britain will have smaller surplus stocks to send there, and land will go up with a run. “lam greatly interested in your remarks about the condition of tho colony and the neighboring colonies. As regards what you say about tho burden of paying interest on the capital advanced to the colony, the thing, in my opinion, lies in a nutshell. The colony capital, has bean glad to get it, and is still glad to get it: but if that capital has taken more the shape of sleeping investment than active enterprise it throws a heavy burden of responsibility on the colonists. But that which they especially feel is the reduced amount of fresh capital, because then it is ell outgoing. The colonists are in a healthy condition when fresh capital continues to come in as the outpayments have to be made. Tho colony is in the habit of decrying absentee capital without considering that it is of two classes. One class is the capital that since the colony was founded has been invited, and that it is neither fair nor honorable nor wise to decry. The other class the capital made in the colocyi and carried away for expenditure or investment elsewhere; that is bad, but is there very much of it 1 “As' to my political action, and its effect Upon the colony, 1 find that the relief given to the polony by my plan of the capitalisation of the Sinking Fund has been equal jto a relief of a quarter of a million taxation per annum for the last few pears, Atkinson, though foe inveighed against it, still continues it. What more can be said ? The people are so mudh the richer. If the rest of our tariff and policy had been accepted, the colony would have retained many thousands of persons who I have left. There was, through tho stupid mistake with the Loan Bill, a loss of at least £75,000. In March, when I had intended to float our Ig&ns, the price wont

up (after Goacheu’s budget) to 104. We lost that golden opportunity and fully £75,000. On the other hand the Government are said to have retrenched more than wo could have done. I am not satisfied that it is so. I think we had laid down broad grounds of retrenchment that would have been both fruitful and sustained, But if the Government are proved to have done more than we would have done in that direction, then they are entitled to special consideration from the large number of people who advocated —quite rightfully—retrenchment. It has yet to be seen if their retrenchment is permanent or fitful, real or a mere postponement of expenditure. I cannot help feeling that I have met with ungenerous and undeserved personal attacks from political opponents, “ Now let me wish yon, &c., “ Julius Vogel.”