SIR JULIUS VOGEL ON THE DEPRESSION.

Wairarapa Daily Times, Volume 6, Issue 1686, 15 May 1884, Page 2

SIR JULIUS VOGEL ON THE DEPRESSION.

We take.from the Times the following extracts from Sir Julius Vogel's address.

Once more the colony is in llie depths of depression, though it appeai'3 to me the causes are somewhat different from those which operated in the former case, The primary causes then, as I remember them, were :—(lst) The re-action consequent upon the.cessatiou ot inordinate expenditure with wars with the Natives; (2nd) insufficiency ot population ; (3rd) want of convenient moans of communication between the producing districts arid the market for sale, or the shipment of produce; (4) generally a want of energy and enterprise, occasioned by the prevailing depression. Some of these causes more or less exist now, but they seem to me the consequence of one over-mastering cause, and that I will- characterise as a general want of confidence, To make my meaning cleair,; I must apparently digress, In this colony, as indeed in all the colonies, the process of the settlement of opening up the country and of establishing the social and commercial fabric has been carried on by the joint efforts of the people within and without its limits. The colonists have supplied labor, skill, energy, and enterprise, and some amount of capital, The balance of the capital has been supplied by persons in Great Britain, who are content witli the interest Iroin four to ten per cent,, according to the risks, the various' investments seemed to involve. So to speak, the British investors have-been sleeping partners with the colonists, and tluy have done well because generally the colonists have done well, and in many cases they have done well where the, colonists have not, because it was in the nature of their investments that they should have a first grasp of the profits, If the colonists had possessed the capital themselves, it would' have been much better for them to have provided it than to divert: portions of their profits to sleeping partners who were thousands of miles.distaut, but the colonists wanted railways and houses, and machinery and monetary institutions, and in'short all the appliances common to a developed civilisation. Thoy have not the capital • themselves, and they were glad to get it provided for them. As they become wealthier they can enter into many of the undertakings for which hitherto they have had to depend on extraneous aid, for the change comes about: gradually in some of the older colonies where there is a great deal of realised wealth. : The colonial nndertakings depending only on colonial capital exceed in influence and magnitude their Home rivals, The ordinary investment of foreign capital in a colony is' trifling compared with the enormous amounts invested in and lent on real property on the faith of its being a reliable asset. So much is this the case, that in course of time the whole basis soundness of a colony depends on the reliable value of its; property. As bullion is the basis of security for the issue of bank notes, so is the value, of property the basis, of security of probably, at least, two-thirds , in value of the commercial transactions of a colony. If I am so far correct, the deductions are clear, viz., that, it impairs the value and the ready 'realisation of property so as ■' to ivitally injure the general prosperity. Indeed, it is easy to see that followed out tci its extreme limit the impairment of the value of property might'bring to ruin nine-tenths of the colonists—all, iii fact, who do not carry their means in a stocking or a money-box. It is ; quito'a mistake to suppose that only the wealthy would suffer. .. The ramification of civilisation runs through every class, and it is quite impossible for'one class to suffer without [affecting the other. A. man owning only ten acres suffers in a degree from a want of confidence as much as the one owning 10,000 acres, I must now make plain the reason for this long digression. It appears to me that New Zealand lias everything in its favor just now, as I will presently relate, excepting that it is suffering from the want of confidence in the value of property, engendered by the operations of various causes du ring several years past. For obvious reasons, I do not wish to refer to particular Governments or particUlar/Mi&ors, but I am. not wrong in saying that one seems to vie with the other as to who shall inspire the most dread in the minds of the holders of property, If they wish to hold and improve their properties, they are stigmatised; as. monopolists who must be ' busted ;np,'. whatever that means. If they wish to sell their lands, they are denounced with equal warmth as speculators.. It seems to be quite forgotten, that these people bought their lands of the Government, and paid for it -what was required of

thetn at tlio time., As far as I can ascertain about half 'tile; property in the colony can be purchased on easy terms, so frightened are its ownere. ; It is to be remembered thatinsiduous efforts of the kind may go on for years exerting a corroding effect, Without that effect appearing on the surface. The frightened landowner who longs to sell out and got awayirom the'colony, dares not say 1 so, He must ,wear a cheerful face to his equally nervous but apparently as cheery neighbor, and so the circle enlarges, Smiles without, but bitterness within, as property becomes less ' liquid,' Tp.use ii : wellknown phrase, the depression in business and the difficulties of individuals become more and more emphasised. ' I dislike the property tax as it diminishes the value of property by far more than the amount it returns. As regards its influence on personal property it is a tax on culture, on refinement, on education, on the arts of production, on all, in fact, having a tendency to improve the colony. As regards its effect on real estate, it is open to the vital objection that it is not expended; in the neighborhood where it i 3 raised. It is, in my opinion, most essential that money raised by the direct taxation of real property should be spent by local boards for local purposes. I see no -reason to doubt that the property tax, as far as it is needed, qan be replaced by a less objectionable system of taxation.