THE CANDID CRITIC REVIEWED.

Temuka Leader, Issue 2372, 21 June 1892, Page 3

THE CANDID CRITIC REVIEWED.

The commercial editor of the London Standard has always (says the Melbourne Argus) been a severe critic of Australian finance. According to our cable message the writer, Mr A. J. Wilson, has repeated and has emphasised, his various warnings and denunciations in the current number of the Investors’ Review. There is a certain amount of truth in some of Mr Wilson’s strictures, but unfortunately for all those concerned—unfortunately for us, and unfortunately for Mr Wilson’s own reputation as a sound and moderate critic— , the article is high-pitched in tone and exaggerated in substance, and, in particular, ordinary business operations are treated as sins special to Australia. We have overborrowed of late in Australia, and we shall have tq bqrrqw considerably ]ess in the future. Ho much is frankly ‘ admitted here, and there is an end of the plea of guilty. But Mr Wilson soars far beyond this. He declares that “ the entire fabric of Australian civilisation is built upon debt.” This is tog harsh a sentence surely to write about a country which between 1850 and 1800 exported as follows : Gold, £340,000,000; Wool, £400,000,000. The gold return is actual, and the wool a low estimate, It la upon these two products tlxat Australian civilisation has been built. Of course Australia has been largely developed by hired capital, because every new country is so developed —is a field fo,r in proportion as money is to be made in it. If each new land Is to remain' in its natural condition until tiro settlers can qrqate capital for its reclamation progress must be nearly as slow as it was ixi the dark ages, and modern conditions render ally such non-progressive policy impossible and absurd- The settler who can get Iris produeo Bout for Always -where ae expended £3O in the old days of bad roads and tedious bullock drays* can well afford to p a .y the £lO, even though half of it goes for the use of the capital sunk in railways. Australia exported wool to the value of more than £22,000,000 last year, and if improvements cheapened production by more millions than the hire of the monej'’ spent on the improvements tlioi’e is a gain all round. This is the key of the situation. So long -is the borrowed capital is earning more than is paid for it, so long is the

use of that money legitimate and profitable. Mr Wilson puts the case in a sensational aspect, but if, instead of saying “ Australian civilisation is built upon debt,” he had remarked that it is built upon “ credit ” he would have made a statement which is applicable to civilisation everywhere. It has been said that “ the world is in pawn,” and this only means that the world is more highly organised than it was at one time. More has been saved ; more improvements have been effected. Mr Wilson says that the colonies must reduce borrowing and increase production jUnder the penalty of early bankruptcy, and here again good advice is given with a harshness at once unnecessary and hurtful. W® are reducing borrowing and increasing pioduction, not with the dread of the terrible consequences predicted by our mentor before our eyes, but because most common-sense and business people see that it is the right thing to do in order to get once more into a healthy financial condition.