THE Temuka Leader TUESDAY, NOVEMBER 24, 1891. ONE MILLION OF MONEY GONE.

Temuka Leader, Issue 2284, 24 November 1891, Page 2

THE Temuka Leader TUESDAY, NOVEMBER 24, 1891. ONE MILLION OF MONEY GONE.

The Christchurch Press is not ashamed to say that one million pounds has already left this colony on account of the new taxation. Now in the first place the new taxation cannot touch anyone for the next twelve months. If the Press is true, therefore, the money is flying away twelve months before it could possibly be hurt. It is also flying away just in the beginning of a year which promises extraordinary prosperity. In our opinion the capitalists would not be in a hurry to withdraw in the beginning of such bright prospects. It is altogether opposed to their usual tactics. But really we cannot see why capital should be frightened away. Capital in this connection does not mean land, for impudent as the Press gang are they could not muster up sufficient audacity to tell us the land was leaving the colony. No doubt they would not hesitate to say it if they thought anyone would believe them, but they know it would not be any good to try it. Then what they must mean by capital is money lent on the security of property in this colony by Investment Companies, Land Companies, Mortgage Companies, and so on. This is the capital which is leaving, and must leave the colony if any at all does, but why should this money leave? We see most of these companies paying a dividend of 10 per cent to their shareholders, and carrying immense sums to reserve, and is it likely they will withdraw from such a profitable investment because an increase of taxation has been put on large landowners. There is no increase of taxation on mortgagees. Let it be remembered, that the tax on mortgages has not been increased. Schedule A, part 2, clause 3 says “ No mortgagee shall be liable to the graduated tax imposed on land,” as will be seen from the papers supplied by the Government. That surely is plain enough. The money lent on mortgage is not subject to a graduated tax, and then what tax does it? Simply the ordinary, plain, unvarnished tax of one penny in the £, the same as it paid before under the property tax, and under such circumstances is it likely that its owners will withdraw it ? As we have said some of those companies are paying a dividend of £lO on every £IOO they have invested in the colony, and is it likely they are going to withdraw their C

I capital because they have to pay 8s 4d of that in taxation ? Let them take money Home, where are they going to put it? No place under the canopy of Heaven offers them better security than this colony. We have got up our name in the monetary world for having exercised self-denial and economy; our exports are increasing tremendously, our private indebtedness has experienced an enormous diminution, we have settled our Native difficulty, and we are in sight of a bountiful 1 harvest, and prices such as we have not known for years. In the face of these facts and bearing in mind that the tax on mortgages has not been increased, we ask is it likely that money is being withdrawn wholesale from the colony ? Only in one instance was the name of the persons who had taken the money away given, and these persons at once denied it. These were , Messrs Holmes and Bell of Blenheim. It is, therefore, plain beyond a question of doubt, that all this noise about money leaving the colony is false, and now we want to ask, What ought to be done to the people who are trying to create a panic by raising this cry for , the mere purpose of sequring their own ends. Are those patriots ? Are they good colonist^?-Or do they not resemble the: bird/Vthat fouls its own nest. If a million 1 of money had been withdrawn from this colony the rate of interest would have gone up enormously, blit instead of that it has i gone down. There are people all ever ■ the colony watching an opportunity to } get an investment for money, but they 5 can’t get it, yet we are to be frightened with this cry got up to further private ends. It is a shame ■ and a disgrace to those who are going on in this way, for no doubt they will t do injury to the colony in the end, and b then they will turn round and blame ■ the Government for it. THE STALKING HORSE. 1 There is at present in South Canterbury a large land-owner, who is in : serious trouble because the mortgagee ’ has foreclosed on him. He had L borrowed £36,000 in Melbourne, and L now the lender of it wants his money, . and means to have it, and unfortunately | the large landowner finds it difficult to t raise that amount. The sum is very large, and it is not easy to get. We s regret this very much, as the same ’ gentleman has worked very hard, and | is deserving of every sympathy. But he is now being held up as a frightful .• example of the effects of the new “ taxation, and as he passes along the street he is pointed out as a man who has been crushed by the Government. 1 Now this is unfair, for honestly the I taxation has had nothing to do with ) his case, H e has had notice of this • several months ago, we believe before ’ the Act was passed-at all, and as there is no increase in the taxation on ( mortgage we cannot see, why the ~ Melbourne money-lender should trouble his head about the matter. If the truth were known we believe it would be found that this money has been borrowed from some one of the monetary institutions of Melbourne , which have lately got into financial difficulties, and are now realising on their securities. It is very probable, too, that the failure of a large * number of Investment Companies all over the Australian colonies will have an effect on us in this colony, for no 1 doubt if any of their money is invested ’ here they will call it in. It will be \ remembered also that English money- ’ lenders sustained very large losses in | South America. It was South > American transactions caused the [ failure of the ■ Baring Bros., and it is ! not at all unlikely that some of those 1 who experienced these losses may have | money in this colony, and find it necessary to recall' it in order to set I their house in order. Thus there are reasons why London. Melbourne, and | Sydney money-lenders may find it necessary to withdraw their capital from us, but they would have withdrawn it at any rate. The amount, ' however, will not be great, for no one ' who wants good investment will take his money out of this colony. We are feeling none of the effects of it yet. Large sums of money are being offered . at o. per cent , per cent., and smaller.sums at 6 per cent., but it is almost impossible for lenders to find good security. That will not be the case if money leaves the country; we shall find a great demand for it, and the rate of interest will go up rapidly. Until we see this we refuse to believe every cock-and-bull story we hear.