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.

Having thus noticed the weakest points in the return, we can proceed to inquire the amount of wealth it makes out that we possess. The amount of debts owed to creditors within the colony does not diminish the total wealth; one set of persons is poorer by the liability, another set is richer by the asset, but the community as a whole is neither richer nor poorer. With respect to outside debt the case is different, and the whole amount must be deducted from our wealth, which will then stand thus:— page 2

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.

Of these debts £3.131,000 was held in the colony in 1887 by the Pest Office Savings Bank, Government Insurance, &c.

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.

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.

Agricultural Produce.—1886-7.

Comparative Table on Mr Hayter's System.

Pastoral Produce, 1886.

Comparative Table on Mr Hanter's Systen.

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.

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:

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.

Value of Mining Produce, 1885.

Produce of Manufactures.

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.

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.

Estimated Total Produce of the Colony.

Comparison of Total Manufactures with Total Imports.

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.

	Products.	Imports.
	1885.	1886.
Printing	£273,886
Agricultural implements	111,823	£ 18,954
Coach and waggon building	128,316	3,195
Ships and boats	47,116	10,516
Woollens	194,311	104,993
Boots and shoes	276,725	157,415
Clothing	237,781	208,852
Furniture and upholstery	162,375	46,635
Cheese and butter	43,094	856
Flax	20,059
Cordage and twine	56,413	8,924
Cured and tinned fish	12,182	32,061
Malt	96,015	262
Coal	255,326	123,315
Flour and meal	754,830	17,277
Preserved fruit and jam	32,292	18,635
Beer	325,182	74,942
Candles	54,593	42,117
Soap	74,570	5,511
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
Aerated waters	94,098	2,875
Total	£5,698,720	£978,010

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.

Proportion of Industrial Class to Effective Population.