The Extent of the Depression.

The question that arises in my mind is—Are we in New Zealand suffering to the extent that is commonly supposed? It is true the country, during the past year or two, has received a considerable check, but much of the depression which various branches of industry are suffering from, must only be regarded as the natural reaction after the undue in flat on which took place a few years back, and as it is hardly more certain, that night will follow day, than that a period of exceptional depression will be followed by a corresponding period of activity, so we may be perfectly certain that this depression cannot long continue. When profits fall below a certain point, production and supply become restricted, and then there is a tendency to prices rising again. This exceptional depression or exceptional prosperity follow each other in regular cycles, and consequently we may safely assume that an increased demand will, within a measureable distance of time set in which will produce a corresponding rise in prices. I, however, have just said that we will consider the extent of the depression, and we can arrive at some conclusion, by examining the trade returns, which show the extent of our foreign business. I do not mean to say that our foreign trade is an exact measure of our wealth, yet it is a fair indication of progression or retrogression, and I think the following figures, in which for convenience I have grouped together the several classes of the colony's exports, and the imports for the decennial period ending 31st December, 1884, will show that we have no serious cause for alarm:—

It would therefore appear, that an excess of imports over exports do not necessarily show that a country is impoverishing herself; in fact she should be adding to her material wealth, if the excess represents national loans, that are strictly applied to reproductive works, while such excesses of necessity increase the permanent wealth of a country, when they represent the payments of interest upon foreign investments, or by ocean freight earnings. For instance, the imports into the United Kingdom in 1884, were valued at £389,774,549 and the exports at £295,371,290. Now seeing that England has to receive upwards of £100,000,000 per annum, from abroad for interest upon foreign investments, and for ocean freight earnings and charges, it is clear that in importing this amount in excess of the value or her exports, she is adding: to her national wealth to at least that extent each year.

With respect to such countries as the English colonies, they import not only the necessaries and luxuries of life, but also material for reproductive works, as well as material for building houses, improving land, and other works that go to create wealth; and as young countries usually offer an excellent field for a profitable and remunerative employment for capital, they generally are able to increase their wealth, in a greater ratio than they increase their debts. If, therefore, borrowed money be strictly applied to the internal improvement of a country, as in the construction of railways, harbors, roads, &c., the effect of the additional taxes levied on the people, to pay the interest should be more than counterbalanced by their share in the advantages accruing from such improvements—It is, however, a good sign with a young country that has incurred a foreign debt to create reproductive works, when the balance of trade begins to turn in her favor, and the value of her exports approach her imports, as it is evidence that the money borrowed is beginning to be reproductive. The fact that the exports of New Zealand during the last quintennial period, as compared with the previous five years, have increased, while the imports have decreased, in spite of the increase in population, is therefore evidence that the money we have borrowed is commencing to be reproductive, and that our industries are making such headway, that we are now enabled to manufacture here many articles hitherto imported.

In examining the figures I have quoted, it will be seen that the imports for the quintennial period ending 1879 amounted to £39,038,009, and the exports to £29,538,390, or an excess of £9,449,619 of imports over exports. When we take the last quintennial period ending 31st December, 1884, the gross imports will be seen to have fallen to £637,866,252, while the exports have risen to £33,259,232, reducing the difference to £4,607,020. But when we take the returns for 1875, and compare them with those for last year, the difference is still more striking, as our exports have risen from £5,828,627 in the former year, to £7,091,667 for 1884, and this increase is in spite of the general tall in prices of nearly all our staple products. While the reduction in the value of the imports, notwithstanding an increase of over 200,000 in the population, must, as I have pointed out, show that our local industries are now supplying many of the articles heretofore imported, To my mind, these figures conclusively prove, that the heavy sums borrowed by the colony are now beginning to bear fruit. A glance at the figures for Canterbury will show still better results, as while the gross exports beyond the colony were £8,062,842 tor the first period of five years, against imports valued at £7,679,864, or a balance in favor of the exports of £382,948; the exports for the last term have increased to £9,191,708, while the imports have decreased to £7,565,625, leaving an excess of £1,626,083 of exports over imports, and on comparing the figures for 1875 with those for 884, it will be seen that whereas the imports exceeded the exports by £64,038 in the former year, the balance for the past year has been turned into a credit of £677,978 in our favor. Before pasting from these figures, I should like to draw your attention to the satisfactory increase page 21 that has taken place in the value of dairy produce, such as butter, cheese, hams and bacon, that have been shipped from the colony during the past ten years. In 1875, the value of these shipments amounted to the insignificant sum of £5314, while the export value of these articles in 1884 had risen to £104,100. Preserved meats also have increased from £8897 to £78,751; frozen meat from nil to £345,090; kauri gum, &c., from £151 526 to £367 387, and timber from £40,046 to £152,341. I cannot, however, pass over without comment the great falling off during the present and last years as compared with the preceding years, in the value of our exports of wheat. During the last year or two, breadstuffs declined in value all over the civilised world, but apart from this general fall in prices, the imperfect condition of the 1885, 1884 and 1885 crops in Canterbury, has intens fied the losses of this district. At the beginning of last year, stocks of foreign wheat in England were so heavy, and sources of future supply so abundant, that a low standard of values was expected; but, on the other hand, the current quotations of the day had fallen to such a point that it seemed most unlikely that, under any circumstances, wheat could go much lower, and therefore, bad as things were, most traders of long experience thought an upward movement more probable than a further decline. We in this country were disappointed, but as the records of financial disaster in England and elsewhere show, we in New Zealand have been far from alone. That the market would run down to a point lower than any it had reached for over a century, and remain in a state of depression probably unparalleled in the whole history of commerce, no one could anticipate. This fall in prices, however, would not have been attended by such serious results, had we been able to land our wheat in England in good condition. Instead of this, the bulk of the harvests of 1883 and 1884 arrived in Europe in bad order. This inferiority of condition, arose through the summer and autumn weather being more or less damp and showery, with a singular absence of the normal warmth and sunshine necessary to ensure wheat carrying for along sea voyage If, then, the country has lost heavily by the decline in prices, we may estimate that an equal sum was lost through the wretched condition in which the wheat reached England The presence of latent moisture in the picked lots of wheat which were selected for shipment, when seemingly quite dry, accounts for the state in which it arrived, but as this was a contingency that was not anticipated either by the farmers or merchant shippers, the losses have not been confined to one class, and the disastrous results of last year's shipments will be felt in Canterbury for many years to come. We, however, may look with some degree of hope to our coming harvest. The area under wheat in America, of the crop just garnered, is some 15 to 20 per cent, less than the previous season, and the estimated yield is from 120,000,000 to 150,000,00 bushels less; in fact, it is said to be the lightest for the past six years. In Europe, also, there are reports of a lessened acreage, and this, taken in conjunction with the fact that America's present deficiency, is considerably in excess of her total exports to England last year, leads to the very natural conclusion, that ere our next crop is marketed, better prices will prevail. It is true, we have no reason to look for any great advance, as there are enormous balances yet to be brought forward, from last year, besides which so much money has been lost in the corn trade, that very few in it have any capital left to speculate with, or the heart to indulge in speculation if they had the money. Nevertheless, I am strongly of opinion, that if our wheat crop in 1886 is secured in good condition, it will realise better results than have been obtained for much of the 1883 crop, or for any of the 1834 or 1835 crops. The discouraging prices, however, for the last year or two, have had the natural effect of decreasing the area sown in Canterbury, as well as in America and elsewhere, and consequently the volume of our wheat exports, for the next year or two, will necessarily be far below the level of our shipments from 1881 to 1883.

Turning now to the wool exports, it is reassuring to find the production of this important staple steadily increasing, as the following figures indicate:—

I need not dwell upon the advantages our farmers have already reaped from this outlet for their surplus stock, and although recent heavy shipments, have caused a serious fall in prices in England, there is every reason to believe the trade will right itself soon, and that as our frozen meats become better known, and better liked, and last but not least, better handled by the English butchers, a higher range of prices can be relied upon than have obtained during the past few months.

Having dwelt at some length on the growth of our foreign trade, I will now, with your permission, refer to one or two items which affect our home trade and position.

If we take the Government Savings Banks returns for the past six years, they will be seen to be equally gratifying, as they bear excellent testimony to the thrift and well-being of the industrial classes.

The following figures, show the total amount standing to the credit of all open accounts, at the end of each year at the 31st December from 1879, together with the returns for the half-year ending 30th June, 1885:—

Government Savings Bank Deposits.

When it is seen that nearly one-eighth of our total population, has availed itself of the facilities offered by the Government Savings Bank, in which to accumulate its savings, and that these savings have increased from £787,005 19s in 1879, to £1,524,221 1s 11d on the 30th June in this year, it must be allowed that the working class as a whole, which mainly represents the owners of such deposits, cannot have suffered much from the depression.

These figures appear to me to be eminently satisfactory, as they not only conclusively prove that there has been an increase in the national wealth of the colony, but the fact that the number of freeholders, has increased by 6421 persons in the short space of three years, is incontestable evidence that the wealth is being well spread over the population.

We may also very fairly ask, where is there another country in the world in which two-thirds of its adult male population are freeholders?

From this sum, however, I take it, that we must deduct something for the capital employed in ordinary trade, by foreign companies doing business in New Zealand, in excess of what they have advanced by page 23 way of mortgage. But making a very liberal allowance for this, we can I think confidently submit our balance sheet to the world, and take some pride in showing, that we have created a national capital of over £1000 per head of the adult male population, in the short space of the forty years which have elapsed since New Zealand became an English colony.

Having I trust been able to show that notwithstanding the severe depression, from which we may be individually suffering, the National wealth of the colony has not been seriously affected, I will proceed to refer to