THE Wairarapa Age MORNING DAILY. TUESDAY, MARCH 11, 1913. A FINANCIAL FLUTTER.

Wairarapa Age, Volume XXV, Issue 10713, 11 March 1913, Page 4

THE Wairarapa Age MORNING DAILY. TUESDAY, MARCH 11, 1913. A FINANCIAL FLUTTER.

'Che remarks made by Mr A. E. Ma bin, President of the Wellington Chamber of Commerce, before tho Imperial Trade Commission,' liavo caused quite a. flutter in the financial dovecot. Mr Ma-bin stated what is a- common-place when lie asserted that the value of our exports over our imports did not represent a ■sufficient sum to pay the interest on our national debt. Tho deduction that was drawn from this remark by at least one of the ■Commissioners was that the country was in a state of insolvency. For ourselves, we cannot see how, in fairness to Mr Ma hin, such a construction could b? placed upon his words. It is true that, in an ordinary business concern, the interest upon moneys expended in development should be derivable from the profit and loss account. A business that pays 'its interest from capital, or from borrowed won ivy, is not regarded as working on sound lines. There is a difference, however, between a private business and the business of a State. Tho former is expected to .slio\v an immediate return upon capital invested in. extension, or development. In the case of the State, it may bo years beforethere is an appreciable return. As an illustration, we have only to quote our railway system. [Millions cf money have been expended upon railways that are still in tho course of construction, and which cannot be brought to a paving point until tbey are completed. So also with our roads and bridges. The interest upon the borrowed millions 'lias to be paid, and it i\s not a fair deduction that hecause the present value of our exports is insufficient to maintain >tlie country and pay interest on the capital borrowed, 'the Dominion is in a state of insolvency. The increase iu the pri-

vato wealth must be considered in conjunction with the incroa.se in public a-ssets. Ao satisfactory system lias been devised of arriving at tne actual private wealth of the Dominion, but ori the assumption that the averago wealth of the Jiving is equal to that left by those who have died, the aggregate private wealth on December 31st, IU.II, would be £457,000,001). The value of public property at thy same date was given ;it £70,1)03,107, an increase of £ 1 J,b70,706 in thive years. The gross public debt of the Dominion last year wa-s £8 f,353,Ui.3. While our public and private Assets, worked out on the basis given above, are equal to about £535 per head of population, our national lebt, at the end of the last financial year, represented only £Bl. 15s "d per head. The margin of security is therefore remarkably good. V\ r e are compelled to admit that our imports have increased, in recent years, at a greater ratio than our exports, and our national debt has been swelled to larger proportions than it might have been. The most that can be .said, however, is that our administrations have been extravagant in their expenditure upon public buildings and public works generally. The system of. constructing railways piecemeal has not been satisfactory. At the same time, the olficial figures furnished in tho Yearbook are convincing proof that the Dominion is as solvent a.s almost any other country in the world. In the course .of a few years, with the adoption of' prudent public finance, and with an observance of reasonable private economy, there is reason to hope that our erports will enormously exceed our imports in both value and quantity. Mr Mabin may bo inclined to follow the example of Mr Harold Beauchamp, and make our imports and exports a test of our financial stability. We need -only state that 'f this test were applied to the three greatest nations of Euorpe, it would be found that every one of them was in a. condition of insolvency. In tho year 1911, the imports of merchandise to Great Britain amount.d in value to £080,157.577, while the exports reached only ,£556,878,434. In the -same year the imports of Germany were about £100,000,000 more than her exports, and those of France about £'80,000,000. A.s far as can he discovered bv a comparison of figures, New Zealand stands, at the present time, in an exceedingly sound position, and this -notwithstanding the spendthrift policy adopted by Governments and. private individuals. As the- Registrar-General stated in the last Official Year-Book: "While tiio annual interest-charge per head of population has not increased during the past twenty-one years, the burden is more easily borne owing to the increased proportiou # of producers in the population, and also to the greater ability of the taxpayer."