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The Pamphlet Collection of Sir Robert Stout: Volume 62

the present position

the present position.

To come now to consider our present position. There can be no doubt that our progress has been much retarded by the serious fall in the price-level of our wool and wheat in European markets, and we have not made that headway which our previous experience has accustomed us to look for as a matter of course. We find ourselves with a foreign debt, on 31st March, 1880, of 31,688 349l., the interest upon which has to be paid in gold, notwithstanding that its purchasing power as compared with our products has appreciated from 25 to 40 per cent, since the bulk of the money was borrowed. And it is here that a finger of warning should be held up, as until there is some certainty of a substantial advance in the foreign values of our leading products, and consequently an expansion in the value of our exports, it is absolutely necessary that our legislators should—to use the words of the Premier—"taper off" our future borrowings, or we may find that we have moulded a concrete debt difficult to liquidate. So long as our borrowings are strictly confined to really reproductive works, there is not much to fear, but we cannot disguise the fact that in the past—the irretrievable past—enormous sums of money have been squandered for which we get no return, and no thoughtful observer can regard the results otherwise than with great concern. We in New Zealand are not, however, alone in having incurred a heavy public burden, as is shown by the striking increase of the national debts of the world during the past thirty odd years. In 1848 the national debts of the twenty-four leading countries in the world amounted to a total of 1650 millions sterling. In 1880 they had increased to 5750 millions. In fact the national engagements of France have, it is estimated, risen from 223 millions in 1854 to 1434 millions sterling on 1st July, 1885; and those of Italy from 30 millions in 1848 to 438 millions in 1884; whilst the United Kingdom and her Dependencies now owe 1100 millions. The ratio of debt per capita in New Zealand has, however, slightly decreased of late, as on 31st March, 1881, the population was 482,019 against a debt of 27,108,269l., or 56l. 4s. 9d. p r head, while on 31st March, 1880, the population was 578,283, and the debt 31,688,349l., thus reducing the ratio to 54l. 15s. 11d. per head. At the same time there is little doubt that foremost in the future troubles of New Zealand will be the question of borrowing, as there are masses in this country who, reckless of the after consequences, demand the expenditure of borrowed money, simply that labour may be paid for at a fictitious value, and would-be popular legislators are too apt to pander to this pressure, in order to curry favour with a certain class of voters. The present has, however, been aptly termed the "age of hope," and doubtless it is this feeling that animates and encourages us to believe that without the aid of "heroic remedies," but with ordinary prudence and self-dental, the recuperative powers of New Zealand are sufficiently great to enable us to put our finances on a solid footing, if we only make the effort to do so. The recent property-tax assessment returns strengthen this opinion, as, notwithstanding the many reverses we have suffered during the past four or five years, there is still a balance in our favour on the past three years' operations. The misfortune is that the balance is not nearly so much as it should be, considering the large sums of public and private money which have been spent in improving our "real estate" in the interval. The following figures, however, may perhaps encourage many of us to renew our efforts:—
Return of Assessed Value of Rateable Property is New Zealand. (Presented to both Houses of the General Assembly, 12th July, 1886.)
Assessment, 1882. Assessment, 1885.
£ £
Boroughs 27,607.897 32,377,098
Counties 66,274,543 64,455,542
Proportions of Crown pastoral lands on which rates are payable by occupiers, included in 1882 totals, stated separately for 1885 3,700,000
£93,882,440 £100,532,640

The serious complaints that have been made of both trade and agricultural depression during the past five years are not reflected in the above figures as much as might have been expected. On the contrary, they show a total increase of not less than 6,650,000l. in the rateable value of our town and country properties during the past three years; and, when we remember that the valuations are practically assessed by the owners rather than by the assessors, we may reasonably infer that, as a whole, they have not been overstated.

Again, upon examination of the published banking returns, we find that there were in Australia and New Zealand on 31st March, 1886, twenty-seven banks of issue doing business in these colonies; that their capital and reserves amounted to 22,004,534l., their total assets to page 6 125,984,240l, of which 13,941,0602. was represented by coin and bullion, and their liabilities to 92,506,003l., 86,577,371l. of which consisted of deposits. On 31st March, 1881, on the other hand, the deposits with these banks amounted to 58,933,163l., so that they have increased by the enormous sum of 27,644;208l., or some 46.9 per cent, within five years. These figures show the strength of the chief financial institutions in Australia and New Zealand, and also that there must have been a considerable accretion to the wealth of the colonies as a whole during the five years under review. Of the six banks doing business in New Zealand, three are practically branches, with colonial headquarters in Australia, so that it is impossible to say with accuracy how much of the 22 millions of proprietary capital is allocated to or owned by New Zealand. The official returns for this colony show, however, that deposits in Banks of Issue have increased from 9,293,497l. on 31st March, 1881, to 10,602,934l. on 31st March, 1886, or by 1,309,437l. It is true this increase is only a trifle over 14 per cent., but none the less it is an actual increase of nearly one and a-half millions, and should help to show that our present position is very far from being desperate. In Great Britain the deposits, including those in the Bank of England, were 512,000,000l. in 1881, and 559,000,000l. on January 1st, 1886, or an increase only slightly over 9 per cent. These figures approximately make deposits per head in Australia (excluding New Zealand), 282.; in New Zealand, 182.; in the United Kingdom, 152. Passing to the Savings Bank returns in New Zealand we find that the deposits advanced from 903,765l. in 1880 to 1,638,035l. on December 31st, 1885, or over 80 per cent.—a result that speaks volumes for the thrift and general well-being of the industrial classes, from whose ranks the bulk of these depositors are derived. Looked at from the same point of view, the following figures lead to the conclusion that the working classes in this country are better off than in any of the three wealthiest European nations.

Savings Bank Deposits, 1885.
Population. Deposits. Rate per Head.
£ £
United Kingdom 36,325,115 91,000,000 2.5
Germany 45,234,061 105,000,000 2.3
France 37,672,048 61,000,000 1.6
New Zealand 578,283 1,638,000 2.8
In considering the position of New Zealand, we cannot well omit reference to its railways. On 31st March, 1886, New Zealand had 1613 miles of railways open for traffic, or a greater mileage per head of the population than any other country in the world, as may be seen from the subjoined figures:—
Railways, Miles. Population.
Europe (1883) 114,196 330,000,000
United States (1884) 121,180 57,000,000
Canada (1883) 9,066 4,600,000
Australia & Tasmania (1884) 6,927 2,668,737
New Zealand (1885) 1,613 578,283

This fact, however, may have led to our being reproached by certain English capitalists for having built railways in the hope that people would come here to use them, rather than for the purpose of supplying the wants of an existing population.

As further evidence of the soundness of New Zealand's position, the following figures indicate that the volume of our foreign trade, unlike that of other exporting countries, has steadily increased, in spite of the heavy fall in prices.

Exports and Imports. Exports and Imports.
1881. 1885.
United Kingdom 694,105,264 644,769,249
France 346,996.480 286,036,320
United States 305,145,125 260,842.055
New Zealand 12,514,703 14,299,860

The visible improvement in the general industrial situation of America, and the signs of a revival of trade in Great Britain, lead to the hope that we shall before long see an expansion both in the volume and value of our trade. If we have been able to hold our own so well in the struggle for material advancement, or even make a little headway during a time of commercial quietude, it is not unnatural to expect that we shall move onwards more rapidly when the turn of the tide sets in.

Whilst considering our position I cannot refrain from a passing reference to the value of our timber industry. It is often alleged that our forests are being so fast depleted, that in the immediate future the supply will be imperilled. But the experience of the world scarcely supports this view, as, according to estimates that have been made, the whole area annually felled is only nineteen millions of acres, and may be increased to forty millions before reaching the annual average increase in the growth of forest trees in exporting countries. Hence, as the area of forest trees in New Zealand in proportion to that which is annually felled is probably equal to the area in the majority of most timber-exporting countries, we are entitled to infer that, with no material increase on our present consumption, we need not be much alarmed about impairing our capital in trees.

In concluding the consideration of our present position, it is a consolation to feel that, whatever may be said about the condition of the commercial and agricultural industries, New Zealand has at least been able to maintain the great bulk of its industrial classes in a higher degree of comfort than any other country. There can be little doubt that the increased consideration which of late years has been given throughout the civilised world to the study of the social sciences, has had the effect of reducing the percentage of abject poverty in it. At the same time we must admit that so far we have been unable to remove entirely this blot upon modern civilisation. In New Zealand, as elsewhere, a certain amount of destitution, more or less severe, appears inevitable, but any impartial observer who has travelled must come to the conclusion that the percentage is very much less in this country than in any other, and that as a matter of fact gaunt hunger is page 7 practically unknown. We Lear much about the unemployed, and doubtless, there may be a few who from time to time have to suffer through want of work, to say nothing of those who are unable to obtain what they consider remunerative employment; but the heart-breaking misery that may be seen in any of the larger cities in Europe or America, and in a less degree in Australia, does not exist in New Zealand. Indeed it bus been well said that New Zealand is the working man's paradise, and in no other country are the poorer classes as a whole so well fed or so well clothed as they are here. It can be readily shown that per head of our population we consume far more meat, more bread, more sugar, more tea, more coffee, and more of all the everyday articles of food than any other known country, and also that the ratio of income per capita is greater, so that, whatever our burdens may be, the masses are not the sufferers therefrom. The fact is, that the present generation are not so well satisfied with their lot as their forefathers. There is nowadays a greater tendency than formerly to exaggerate trouble. At any rate there are better opportunities for airing grievances, real or imaginary, and it is probably this facility for making complaints that causes us to imagine that our ills are very much greater than they really are.