THE Temuka Leader. TUESDAY, NOVEMBER 10, 1891. FRIGHTENED CAPITAL.

Temuka Leader, Issue 2278, 10 November 1891, Page 2

THE Temuka Leader. TUESDAY, NOVEMBER 10, 1891. FRIGHTENED CAPITAL.

It is unfortunate for the opponents of the present Government that the truth is coming out in spite of them. They are doing their best to make the world believe that the country is going to wreck and ruin, but facts belie their theories. Our exports and imports are increasing, RDd the best quarter of a year we have had for a long time was that which closed on the 30th of last September. In that quarter our imports were worth nearly £200,000, or nearly 7s per head of population more than in the corresponding quarter of previous years, large numbers of our exiles are returning to our shores, and notwithstanding the efforts put forth by the wealthy classes to cry down the colony, our hopes are brighter. In three years hence we have every hope that things will be very much changed for the better if the present Ministry are permitted to cany out their policy. It was a cruel thing of Mr Bell, of Blenheim, to spoil the little game of those who were crying down the credit of the colony. The Evening Press said that Messrs Holmes and Bell wei’e removing money out of the colony because of the taxation proposals of the present Government, but Mr Bell immediately denied it, and thus shattered their most effective argument. In the same way when it was cabled from London that at the meeting of directors of the National Bank of New Zealand it was stated that Investment Companies were removing their money, the Bank here immediately denied it. Thus when the Opposition make any definite statement it is always denied, but of course so long as they confine themselves to general assertions and merely say, “ Capital is being frightened out of the country,” no one can contradict them. There is one way in which we can find out whether or not capital is being withdrawn from the country, and it is this: Almost all the foreign capital in the country is lent to land-owners, and it is certain that money thus invested cannot be obtained at a moment’s notice. If the foi’eign capitalist or the Investment Company which represents him, has lent the money for five years, he cannot withdraw it until the end of that time. If it has been lent for three years the money is not recoverable before then. It is impossible for such people to withdraw their capital in the meantime, for they have no control over it until the time for which they have lent it expires. All they can get is their interest, and that leaves the colony at any x-ate to pay dividends to shareholders of investment companies. It may be said that mortgages falling due will be foreclosed upon, and the money thus realised will be taken away. In that case a Sfj-taiu tfyiug must happen; the mortgagee

will seize the goods and chattels of the mortgagor and sell them, and we shall see it. If that happens to any extent we may then believe that capital is leaving the country, but until Shylock comes to claim his pound of flesh, we need not trouble about the cry of frightened capital. Very probably it will be argued that the land-owner may be able to pay off the mortgagee, and thus prevent the world seeing the transactions of the capitalists. It may be so, but in such a case what does it matter where the mortgagee and his capital go so long as it is replaced by other capital ? It would be the grandest thing that could possibly happen, if all the foreign capitalists in the country were to fly away, provided we could raise sufficient money locally to meet our requirements. One of the Opposition leaders —we believe Mr Rolleston—said the other day there were millions of money lying idle in the colony waiting for investment. If such is the case is it not better for us that some of the foreign capital should go away, so as to make room for the profitable investment of our own money ? One thing the people can rest assured of, and that is that much capital cannot leave the colony without our knowledge. If capitalists decide to withdraw from the colony, they will proceed to sell out the properties on which they have lent their money, the rate of interest will fly up at a tremendous rate, and money will become very scarce. None of these indications at present are observable, and until they make their appearance no one need trouble about frightened capital.

PROTECTION. That was a rather suggestive information which the deputation of bootmakers gave the Premier in Christchurch recently. They told him that with the protection which the present tariff gave them they were able to compete successfully with the better class of imported boots ; they had, in fact, been able to shut out the better class, but there was another class with which they could not compete, and that was boots made of paper. The effect of the tariff, therefore, is to shut out of the market well-made English leather boots, and allow the paper boots to come in. It is we think, a mistake, to allow this to go on, while there are two ways of altering it. One is to lower the tariff so as to destroy our own manufactured goods, and let in the best class of English boots ; the other is to increase the tariff so as to shut out the boots made of paper. So far as we are concerned, we think it would not be advisable to ruin our own industries, and we would much prefer to increase the tariff than to lower. Mr T. K. Macdonald, chairman of the directors of the Wellington Woollen Factory, also complained of shoddy being still largely imported, notwithstanding the present tariff', and hinted that more protection was necessary. It is, therefore, possible that before long an increase in the customs duties on certain articles may be expected. It is also likely that at the same time the duties on the necessaries of life will be lowered.