The Wealth and Annual Production of New Zealand.
Methods of Ascertaining the Wealth of the Colony.
The public wealth of a country is usually to be discovered from official returns; but to arrive at the amount of private wealth various tests have to be applied, the most satisfactory of which is to take the amount of property left at death, and to divide it by the number of persons who die, the result being the average wealth per head; since, as Mr Hayter says," it may be supposed that the average amount left by each person dying is equivalent to the average amount possessed by each person living." But in this colony we have the exceptional advantage that we can check our result by the returns made to the Property Tax department. There is, however, one great drawback to the usefulness of these returns—viz., that they are made by taxpayers under the strongest sense that they form the basis of taxation, and that consequently it is most improvident not to put down every item at its lowest value, or not to leave it out altogether if there is any excuse for doing so. I lay some stress upon this because there is an idea abroad that properties are often returned at too high a value. If this is ever done it is certainly not of sufficiently frequent occurrence to bring the total value up to anything like its real amount. The probate returns no doubt give a fairer view of the case, though they understate the real wealth, because no account is taken of sums under £100. I therefore take the probate returns as the basis of my calculation of the national wealth, and regard the property tax return as chiefly valuable because it gives us an idea of the items.
Wealth According to the Property Tax Returns.
The return from which I have taken the figures in the first table was made by the Property Tax department last year, and it is to be found in the appendix to the journals of the House of Representatives, marked B—6. The bulk of the items explain themselves without any comment, but those which compose the "Private Debts" are arrived at in a necessarily very imperfect fashion. In the first place, the amount of foreign capital lent on mortgage is only the estimate of the department, though the wide knowledge of the financial condition of the colony possessed by Mr Sperrey and his assistants makes it well worth quoting. In the second place, the debts owed to foreign creditors are arrived at by deducting the amount of debts returned as "owed to persons making statements" from the total indebtedness. Now, in many cases it is known that in their statements people omit all, or a great part, of what is owed to them, so the debts to foreign creditors are made to appear much larger than they really are. Thus, we may assume that the amount set dewn in the table as owed to persons in the colony is too small, while that set down as owed to persons outside the colony is too largo. The total indebtedness is probably fairly correct, though it may be unduly swelled by some large mortgages which have been registered in two local offices, and therefore counted twice over.
|Total private property||£137,137,000|
|Deduct debts owed outside the colony||28,375,000|
|Total private wealth||£108,762,000|
The private wealth divided by the number of persons in the colony (578,482 in March 1886) gives us £188 as the average wealth of each person.
In closing this part of my inquiry I must repeat that there can be no doubt that the amount thus arrived at is considerably below the real amount.
Wealth of the Colony.
According to Property Tax Returns based on the Assessment of 1885.
|Education, municipal, and other reserves||7,252,000|
|Debt of the colony, deducting sinking fund||£31,688,000|
|Debts of local bodies||5,616,000|
Of these debts £3.131,000 was held in the colony in 1887 by the Pest Office Savings Bank, Government Insurance, &c.
|Furniture and household goods||4,288,000|
|Horses, cattle, sheep, and other live stock||8,634,000|
|Produce, merchandise, and agricultural implements||11,658,000|
|All other property (including deposits in banks)||21,729,000|
|Mortgages (foreign capital)||£16,832,000|
|Debts owed to foreign creditors||11,543,000|
|Total owed outside the colony||£28,375,000|
|Mortgages (colonial capital)||£14,988,000|
|Debts owed to local creditors||8,822,000|
|Total owed inside the colony||£23,810,000|
|Total private indebtedness||£52,185,000|
|Total private wealth||£108,762,000|
|Wealth per head||£188|
Wealth According to the Probate Returns.
The probate returns for New Zealand have not hitherto been published, and I am indebted to Mr Hickson and his assistants for having made me the very laborious calculation of which they are the result. It will be observed that they are averaged for a period of five years, the reason being that the falling in of a very large estate may cause the average of any one year to be misleading. The Victorian calculation is copied from Mr Hayter's "Year Book." Those for New South Wales and the United Kingdom I worked out from returns contained respectively in Mr Coghlan's official work "The Wealth and Progress of New South Wales," and in the "Statistical Abstract of the United Kingdom."
Estimate of Wealth from Probate Returns.
|Years.||Amonut sworn to.||Total number of deaths.||Average left by each Person.||Total Wealth.|
It will be noticed that the probate returns give us £214 a head, a larger amount of wealth than the property tax returns do. This is only what might be expected from what we have seen of the errors likely to arise from the former method of estimating our wealth; and I feel convinced that the probate returns themselves give us a result that is lower than the reality. For purposes of comparison, however, the probate returns are excellent, and the comparison shows us that this young country is not so very much poorer than the richest of old countries—the United Kingdom. The capital with which we are working is, then, ample—instead of being very poor, we are really very rich. It is true that we are far from as rich as Victoria or New South Wales; but one very hopeful point crops up in the comparison:—Twelve years ago Victoria was not so rich per head as we are now, though her population was considerably greater and her resources probably better developed; her great advance has been made in the last 12 years. The figures in this case are one of the most striking instances of progress that I have ever seen in print, but the progress of Victoria seems to have been actually exceeded by that of New South Wales, where, if the returns are correct, the average wealth per head rose from £184 in the quinquennium 1877-81 to £323 in that of 1882-86. If we are page 3 likely to follow in the steps of these sister colonies our prospects are certainly very good. Whether we are likely to do so depends upon our production, which we will now examine.
Agricultural and Pastoral Produce.
Our annual production is a far more important matter than our accumulated wealth. Far more important because there can be no doubt that if our production is satisfactory, then, no matter how poor we may be, we must grow in wealth, unless we are altogether thriftless; while if our production is not satisfactory, we must grow poor, however great our accumulated wealth. In the three principal branches of production—viz., agriculture and pasture, mining and manufactures, we have statistics which give us a very fair idea of our position, and, fortunately, there are even better materials for ascertaining the position of Victoria. The two tables illustrating the production of our agricultural and of our pastoral industries (1886-7) are prepared on Mr Hayter's system, in order to give us as exact an idea as possible of how we compare with Victoria. The amounts of produce in both colonies are probably fairly accurate, but difficulties arise in respect of prices. The Victorian statist has prepared his list of prices from a number of returns showing the value of produce on the farm in every district of the colony. The prices are simply the average amounts that the farmers obtain; no account is taken of the value added by transport, &c. Now in this colony similar returns are not obtainable, so I had no resource but to make an estimate of the values. This I did by comparing the export returns (which, however, were only available for 1886) with the market reports and getting the results criticised by experts, who very kindly rendered their assistance. I have, I believe, made a very low valuation, but it must be remembered that the farmer does not get the whole amount shown in market reports and export returns. In the case of smaller crops the estimate is necessarily very rough. The value of dairy produce is shown by an estimate on Mr Hayter's system, but in case the amount should appear very large I may mention that I have checked it by the returns of butter and cheese given in our statistics and by an estimate of the average consumption of milk made by the American statistician, Mr Atkinson. The produce of cattle on Mr Hayter's system is based upon the number of breeding cows, al-lowing one calf per annum to each, and assuming that one-third of the calves are killed for veal. It includes the growth of animals in value, but for full particulars of the method I must refer you to the "Victorian Year Book," p. 450. The annual increase of sheep in Victoria is taken at one quarter of the total number of both sexes over six months old, which is the average arrived at by actual computation of a large number of cases; for New Zealand I have taken the increase at one-quarter of all sheep and lambs, but the result is, I think, not excessive, since when compared with the number of ewes it gives an average lambing of only 64 per cent. The increase of pigs is estimated at 30 per cent, and that of horses at 5 per cent, on the total numbers. If the rate of increase should appear, as it did to me in some cases, to be put too high, it may be checked by considering the total numbers of stock and allowing for the average duration of life, and I believe the result will be that it will be generally admitted to be mode-rate. The prices of stock are taken as an average of the prices obtaining for full-grown animals fit for the butcher in the case of cattle, sheep, and pigs, and for horses in their prime. My estimate for New Zealand is more arbitrary than in the case of agricultural produce, because the export returns, which give a rough average in that case, are useless in this, as only the very best classes of beasts are exported.page 4
Having drawn up his estimates of the value of agricultural and of pastoral produce, Mr Hayter adds the two totals together and gives the result as the value of the produce of rural industry; but, though I am unwilling to differ from so high an authority—and one whom have often suspected of being wrong, and in every case but this found to be right, I consider that before adding the totals we ought to deduct the value of the produce that is consumed by animals. The farmer does not make both the value of his hay and the value of the bullock that is fed upon it; he only makes the value of the bullock. This is so plain that Mr Hayter takes no account of the value of grass, because it is included in the value of stock. On the other hand, probably the bulk of the oats and a considerable proportion of the hay are sold off the farm, and consumed in towns or exported. The problem now is, how much of this produce are we to consider as being consumed on the farm, and therefore counted in pastoral produce? We have no data for deciding this, and we are further hampered by the comparison with Victoria, where the production of hay is such a large and disproportionate item. The best I can do is to suggest that we should consider one-quarter of the oats and one-half of the hay to be consumed on the farm, together with all the green forage (though a good deal of that must be sold), and the whole of the "other root crops," which will be consumed by sheep and cattle. On this basis I will estimate the net produce of rural industry, and if the process be objected to we can fall back upon the original table of gross produce for the purpose of comparing New Zealand with Victoria. The result of the comparison is to show a net produce of over millions in New Zealand, and over 141 millions in Victoria. To arrive at an idea of what this means to the farming interest, we must divide it by the number of persons engaged in the production. The numbers for New Zealand are taken from the census; the numbers for Victoria are from Mr Hayter's estimate Year Book, 1886-7, page 57. The result of the calculation shows a produce per head of £143 in New Zealand, against £104 for Victoria. If we adopt Mr Hayter's system, and take the gross product of both industries, we get the result of £160 in New Zealand and £118 in Victoria. Whichever calculation we take, the produce of New Zealand in proportion to the number of workers is far greater than that of Victoria. Low as our prices are, our produce is so vastly greater that its money value exceeds that of Victoria by the large amount thus shown. Under these circumstances, and in spite of the great efforts that have been made to stimulate manufacturing industries in Victoria, it may appear peculiar that there is a larger proportion of agriculturists in that colony than here. The class "Engaged in Pastoral Pursuits and Agriculture" contained in New Zealand 11.3 per cent, of the population, and in Victoria 13.8 per cent. But this disproportion is really only apparent itself. It is caused by a peculiarity which has constantly to be taken into account in this comparison—viz., our large families: if we deduct the "domestic" class from the total populations, and so get something more nearly approaching to, though still exceeding, the number of persons whose produce we can take into account, we get about 32 per cent, engaged in rural industries in New Zealand against about 30 per cent, in Victoria. If the further question be raised of how is it that prices are higher in Victoria, I suppose the general answer would be, because there is a larger town population to consume the products agriculture. The fact is, however, that it is not a question of town population; the whole population are consumers of agricultural produce, and instead of being more numerous in proportion to producers than in this colony they are less so, as is shown by the proportion of 11.3 per cent, of agriculturists in New Zealand against 13.8 in Victoria. The cause of higher prices is therefore not the superiority in number of the consumers.page 5
The real cause plainly is, that in Victoria more labour is required to produce a given amount of agricultural produce. The higher prices are simply the result of the lower rate of production. The last point in this connection is that if the farmers and stockraisers suffer from the low prices, the rest of the colony must gain. The farmer, in the long run, cannot gain much from the superior productiveness of his land. Higher prices for freeholds or rents for tenancies, and lower prices for produce are the invariable result, but though the farmer may not be greatly the gainer, the community is, and the country which gets the largest return to a given amount of labour is the country which, other things being equal, must be the most prosperous in the long run.
The last thing to notice about the table of net produce is that the previous calculations do not include the whole produce of agriculture. There are some smaller items which have been omitted because no account is taken of them by Mr Hayter. I give the results of my calculations about them, and shall add the result to the value of produce when I come to calculate the total produce of the colony. They are:
|Grass seeds, 1,072,922 bushels at 5s||£268,230|
|Poultry, 1,679,021 head at 1s 6d||125,926|
|Eggs (two for each person per week), 1s 6d a dozen||361,545|
|Rabbitskins (exports for 1886)||65,694|
In addition to this there is all the produce of gardens under one acre in extent, as to which we have no data, though the value must be considerable.
Net Produce of Rural Industries.
|Gross agricultural produce||£3,405,000||£7,260,735|
|Less one-quarter of the oats, half the hay, and all green forage and "other root crops"||808,849||1,852,166|
|Net agricultural produce||£2,596,000||£5,408,569|
|Persons engaged in agriculture and pasturage||65,178||136,976|
|Produce per head||£148||£104|
|Produce excluded from comparison||£821,000|
The most important facts in respect of this industry are the stationary condition of the production of gold and the very rapid growth of the production of coal. With respect to the former, it remains to be seen whether the investments of foreign capital in quartz reefs will result in again raising the exports of gold; but so far as coal is concerned, the increase in the years between the last census and the one preceding it may realiy be called extraordinary, the amounts raised being 277,918 tons in 1850 and 481,658 in 1885.
As there was no mining of any importance in Victoria except gold mining, I have compared the average earnings of all miners in New Zealand with those of gold miners in Victoria. The result is distinctly in favour of Victoria, but it is impossible to be sure of the number of men really engaged in the industry in either colony. The numbers given for Victoria are only estimates of the Victorian Department of Mines, while our census returns probably include a number of men who are only working a part of their time at mining. The reason for this opinion is that in the mines of which we have particular returns—that is, practically, all the mines worthy of the name that are in operation—the average product is £252 per head for gold mining and £211 per head for all mines and quarries; and if we exclude both the hands and the products thus accounted for, we get an average of only £48 a head for the remaining miners. Thus in this case the comparison is unsatisfactory, but the value of total products is probably not far wrong, depending, as it does, on the export returns in the case of gold, and on special returns from managers of mines and quarries for the other items. Kauri gum digging cannot be included among mining industries without spoiling the average, because the return per head appears to be much larger than is really the case. The only diggers who are enumerated in the census are Europeans, but it is known the large quantities of gum are the produce of Maoris, which accounts for the fact that the produce per head appears to be abnormally high.
Value of Mining Produce, 1885.
|Value of total produce||£1,164,599||£3,091,244|
|Number of miners||12,643|
|Average value of produce per head||£92||£108*|
|Excluded from comparison—|
|Kauri gum, exports 1885||£299,762|
In both New Zealand and Victoria very elaborate returns of manufactures are obtained, and if we can trust the figures we may get a very accurate idea of our relative positions. The commonest objection to the comparison is that we include numbers of small establishments which would be excluded in Victoria. All the information that I could obtain from the Registrar-general's department went to show that this is not the case; that the class of establishments is the same as in Victoria. The comparison, however, made out such a good case for the manufactures of this colony, that I could hardly believe it to be correct; so I tested the returns in various ways, examining the nature of the industries, the number of hands in particular works, and the horse power employed. The result was that I concluded the comparison is a perfectly fair one, and the best illustration of this is the page 6 amount of power employed in comparison with the number of the establishments. We employ 19,315 horse-power in our 2268 establishments, while Victoria employs 20,160 horse-power in 2813; so that relatively our power is the greater. The comparison, however, is not quite fair until we exclude mines, which are put in a separate table by the Victorian statist; if we do this we reduce the horse power to 15,615 and the establishments to 1961, which gives an average of just under eight horse-power to each establishment, against just over seven horse-power in Victoria; even this is not quite conclusive, because some of our power is manual, &c., whereas only engine power is reckoned in Victoria, so I will compare the number of establishments using engines. In Victoria there were in 1886 1409, and in New Zealand 815 using steam, 281 using water, 66 using gas, and 44 using other motive powers. If we compare the number of hands per establishment we find hands in New Zealand against 17 in Victoria; which, allowing for the very large works in Victoria, seems to show that the comparison is fair. With our widely separated centres of industry we have naturally smaller works, and more of them. If more shops where some industry is carried on had been included, our average number of workers to each establishment would be far smaller than this. Another reason for beliving that our returns represent real industries, aided by machinery, is the high average produce per head, and yet another is that thinking over particular branches of production, such as dyesinking, I find they are considered too small to be taken into account, although we know that they exist in numbers which must make the total produce worth consideration.
For these reasons, the comparison seems to me to be fair, and accordingly I show the results in the subjoined table. If you compare it with the statistics you will find I put down our total production at a smaller amount than is given in them; the reason is that I have deducted mines because they are not included in the Victorian tables. The value of raw material is generally given in the returns of both colonies; but our returns appear to be less perfect, and in the case of "animal matters" and sawmilling I have had to estimate the value, which I did by taking the same proportion as obtains in similar industries in Victoria and adding over £70,000 to the total to represent the probable excess in the value of our raw material in animal matters. In any case the value of raw materials given can only be regarded as roughly approximate. The value of the net produce in New Zealand is very high, but on account of the uncertainty about the value of raw material I cannot regard it as anything like exact. It will be seen, however, from a later table that it agrees fairly well with average production in other industries.
Produce of Manufactures.
|Deduct value of materials||2,980,000||7,997,000|
|Produce per head||£168||£140|
The next table shows the total produce of the three industries we have examined, and the average produce, which amounts to £145 in New Zealand, and £111 in Victoria. But this £145 is not the whole result of these industries; to get that we have to include various smaller items that could not be brought into the comparison with Victoria. When these are added we get a total of over 15¾ millions, and dividing this by the number of workers, to which we must add 1297 kauri gum diggers (there are really more, if we could count Maoris, but not enough to affect the present average), we get £155 per head. On making the comparison with Victoria we see that, taking an average of the leading industries, there appears to be no room for doubt that we are much the more productive. This being the case, however disordered trade may have become, we cannot resist the conclusion that our prospects are not merely good, but brilliant.
Net Produce of Agriculture, Pasture, Mining, and Manufactures.
|Agriculture and pasture||£9,670,000||£14,319,000|
|Produce per head||£145||£111|
|Excluded from comparison-Agricultural||£821,000|
|Kauri gum, bark, fungus, phormium, and fishery produce||380,000|
|Total produce of these industries for New Zealand||£15,768,000|
|Produce per head (counting kauri gum diggers)||£155|
Estimated Produce of Remaining Wealth-Producers.
We have now examined what I may call the primary industries, those on which all others depend, and for which we have statistics to guide us; but we have by no means analysed all the production—we have still to account for that of page 7 the "industrial" producers, who are not working in factories, and for that of ordinary labourers. The only way to form any idea of the value of their produce is to adopt the system by which Baxter, Levi, and Giffeu have endeavoured to estimate the national income—that is to take the numbers and estimate annual wages and profits. This system is even less exact than the one we have hitherto pursued, so, though I shall attempt it, I will not use it for comparative purposes, nor shall I lay any stress upon the results. The produce of the building trade is estimated by taking average wages from the official returns, and deducting something over two months for time out of work, allowing interest and profits at 10 per cent, on £1,000,000, and assigning £150 each to employers, many of whom are no doubt in a very small way of business. This is checked by comparison with the number and size of houses built, and such an allowance as I could make for the probable value of repairs. The result would be too high if we only consider the condition of the building trade in Dunedin at the present time; but, remembering that we are dealing with the whole colony and the year 1886, 1 venture to submit it for criticism. The produce of the remainder of the industrial class is based on average wages, allowing £120 a head, and £100,000 for interest and profits. I have estimated the value of the produce of the class of general labourers at £100 a head, and have deducted half of them, because it is impossible to say how much of their labour may have gone to bring up the results of the industries for which the produce has already been estimated. The total, 20½ millions, gives us an idea of the wealth annually produced—the wealth, that is to say, out of which we pay the interest on our outside debts and support our nonproductive members.
Income of the Colony.
The total income of the colony is, of course, considerably larger than this 20½ millions, though it is really only the same wealth passed from hand to hand by the instrumentality of money. I have tried to arrive at an estimate of it by going through all the classes of persons in the census and allotting incomes to them, and have tested this by comparison with the average results obtained in the leading industries, and by whatever other tests I could obtain from the works of the leading statisticians; the result is, though I have some hesitation about giving it, that I think the total amount cannot be less than £30,000,000, while it may be considerably more. If we accept this estimate, we get an average income per head of over £51, which may be compared with Mr Giffen's estimate for the United Kingdom in 1883 of a total of £1,270,000,000, or about £35 a head.
In submitting my calculations to this meeting, I can only add that I regret I am not more thoroughly qualified for the task I have undertaken, and I hope the criticisms my work will meet with will result in exposing weak points and settling doubtful ones.
Estimated Total Produce of the Colony.
|Estimated produce of building trades (2337 employers, 9355 employes)||£ 1,600,000|
|Estimated produce of remainder of industrial class (less 8763 considered to be distributors), 19,794 persons||2,375,000|
|Estimated produce of half of "labourers and others," 8521 persons||852,000|
|Produce of industries already given||15,768,000|
|Total value of all produce||£20,595,000|
Since much misapprehension exists respecting the manufacturing industries of New Zealand as compared with those of Victoria, I append some tables to illustrate their position. The "Comparison of Manufactures and Imports" goes to show that we are proportionately, whatever the reason may be, less dependent on foreign countries than Victoria is. The table of "Manufactures and Corresponding Imports" gives some idea of the variety of our production and of their possible extension, supposing outside competition to be absent. The industries given are all those of which we have special statistics, except iron and brass, which I cannot compare owing to difficulty in deciding what is to be considered raw material, &c. Iron and brass manufactories produce to the value of £351,739, but the imports are considerably greater. Printing does not figure in the imports, because imported books cannot be said to come into competition with local printing to any appreciable extent. The value of earthenware imported is not included.
Comparison of Total Manufactures with Total Imports.
|Excess of imports||£766,921||£3,489,575|
The figures respecting New Zealand are for 1885, those respecting Victoria for 1886; the produce of manufactures being estimated on Mr Hayter's basis—"Year Book," p. 484.
Value ok Products of Principal Manufactures and of Corresponding Imports.
|Agricultural implements||111,823||£ 18,954|
|Coach and waggon building||128,316||3,195|
|Ships and boats||47,116||10,516|
|Boots and shoes||276,725||157,415|
|Furniture and upholstery||162,375||46,635|
|Cheese and butter||43,094||856|
|Cordage and twine||56,413||8,924|
|Cured and tinned fish||12,182||32,061|
|Flour and meal||754,830||17,277|
|Preserved fruit and jam||32,292||18,635|
|Saw milling, sashes, doors||1,177,713||50,662|
|Brick, tile, and pottery||91,797||615|
|Boiling down and meat||543,878||1,334page 8|
|Tanning and scouring||£634,915||£55,974|
In the next table manufacturing hands are compared first with the total population, and secondly with population, less "Domestic Class," The very material difference in the result is caused by the larger proportion of children in New Zealand. The table shows that according to the return of manufactories (excluding mines) we have a larger proportion of workers engaged in this branch of production than Victoria has. The returns for New Zealand are those of the census year 1886. Those for Victoria are the latest obtainable—viz., for 1887. The population of Victoria is that of December 31, 1886.
The Proportion of Manufacturing Hands to Population.
The next table shows that, whether or not our manufactures are of the same high class as those of Victoria, they have certainly been progressing faster, for it can hardly be supposed that our officials have been continually making fictitious additions to the number of their hands.
Proportion of Hands to Population at Successive Periods.
In this table the population of Victoria is estimated for the middle of the year. The propostion of hands per cent, of population is actually under 4 5, if we take the mean population, but closer to it than to 4.4.
The next table shows the proportion of the various industrial classes to the effective workers (population less domestic class). The comparison is made for the year 1881. The industrial class includes workers in manufactories and all artisans, but not common labourers. The numbers of this class had increased slightly more than in proportion to population in New Zealand at the census of 1886.
* Gold only. Mr Hayter's estimate.