Other formats

    Adobe Portable Document Format file (facsimile images)   TEI XML file   ePub eBook file  

Connect

    mail icontwitter iconBlogspot iconrss icon

The Pamphlet Collection of Sir Robert Stout: Volume 70

III

III.

Relative Growth of Indebtedness, Population and Production.

It is desirable that we should have a clear grasp of the relative growth of (1) the indebtedness, (2) the population, and (3) the production of Australasia, Although we have already largely pursued this subject through the two preceding articles, there yet remains much to be considered. The question of how far the increase of population has kept pace with the growth of indebtedness is one of importance, but it is by no means so important as the question of how far the increase of population has kept pace with that of indebtedness. We fear the result of the inquiry will not be as satisfactory as could be wished, either under the head of population or of production. As regards popu- page 20 lation, the increase by immigration, rather than by excess of births over deaths is the point to which attention may be first directed.

Increase Population by Immigration.

(Emigration being deducted.)

Five-year periods. Australasia. New South Wales. Victoria. Queensland.
1877 to 1881 197,264 88,231 6,998
1882 to 1886 271,146 110,158 46,148
1887 to 1891 131,906 57,637 65,614 29,349

The moat surprising thing about these figures is the extra-ordinary fluctuations they exhibit. The first period showed an aggregate average immigration of 89,453, the second period tin average rose to 54,229, whilst in the third period it dropped to 26,881, Taking the figures for the separate colonies the differences are still more marked. To give the numbers year by year for each of the seven colonies would afford interesting food for thought, but would load this article too heavily with figura It may, however, be said that the increase of population by immigration per year in New South Wales has ranged from 6633 (in 1888) to 27,278 (in 1883); in Victoria from 548 (in 1877) to 26,757 (in 1888); in Queensland from 2678 (in 1879) to 33,656 (in 1883); in South Australia from 186 (in 1882) to 11,622 (in 1831); in Western Australia from 38 (in 1882) to 4208 (in 1886); in Tasmania from 386 (in 1880) to 4016 (in 1891); in New Zealand from 211 (in 1887) to 18,723 (in 1879) The fluctuations extended further than represented by a mere difference in the number of arrivals, for, with the solitary exception of New South Wales, each of the seven colonies, in certain years, lost more by emigration than they gained by immigration. South Australia and New Zealand were the two chief sufferers in this respect. For seven years past South Australia has been a regular loser, whilst New Zealand has lost in five out of the last six years.

The year 1883 recorded the largest total of immigration ever seen in Australasia, with the exception of the gold-few year of 1854, the number being 81,104. Five years later, in 1888, the number fell to 17,580, the smallest immigration of any one of the fifteen years which we are reviewing; indeed, in the last forty-one years—1851-91—there are only four years page 21 when so small a total was recorded. The immigration returns convey a severe rebuke to those people who would close the labor market of the colonies to outside labor, for everyone knows that during the years when the arrivals were exceptionally heavy the unemployed trouble was unknown, and that during the last five years, when the arrivals fell to less than one-half of what they had been, there was a marked increase in the number of men out of employment. In passing it may be noted that the decrease in immigration during the last few years is due less to depression in Australasia than to prosperity in Great Britain.

Various authorities have estimated the value of an immigrant to a new country at from £200 to £260. Every man who arrives in these colonies contributes to the revenue, assists in the production of wealth, and shares in the burdens of the community. The population of Australasia has been increased by immigration to the extent of 600,000 during the past fifteen jars, in which interval the public indebtedness has increased more than 130 millions, and the entire indebtedness, public and private, more than 200 millions. It would, of course, be absurd to argue that borrowing should be regulated by the immigration, bat if there are large borrowings it is pleasant if there be a rapid increase in the number of those sharing the responsibility. We scarcely think the increase of population is large enough to warrant much satisfaction. 600,000 in fifteen years only averages 40,000 a year, a very paltry exhibit beside that of the United States, where in one year, 1882, the immigration reached no less than 789,000. According to Mulhall, between the years 1851-88 more than twenty-two million people emigrated from Europe. These facts make it clear that the movement of population towards Australasia the past fifteen years can only be looked upon as a moderate one. The tendency of population to concentrate in large cities is one of the most marked features of recent years; but nowhere, probably, is this tendency so extreme, so serious, as in Australia. The following figures are instructive:—
1871. Per cent. 1881. Per cent. 1891. Per cent.
Victorian population in Melbourne 28 32 42
New South Wales population in Sydney 26 29 33
Queensland population in Brisbane 12 14 25
page 22

We fear these figures indicate that the enormous borrowings of late years have tended to bring about an undue, an unusual enlargement of our cities, an enlargement which in the case of Victoria is undoubtedly of a most abnormal character. It is scarcely in young communities that we should look for such concentration of population as we find in the capitals of Australia. So much for the growth of the population as compared with the growth of indebtedness.

Increase of Production.

Now for the growth of production. Are we to-day producing so much more wealth than we were fifteen years ago, as to make it certain that we have done light to go as deeply into debt as we have done? Let us compare the position of affairs in regard to certain primary industries, via.:—(1) agriculture (2) pastoral pursuits, (3) dairying, (4) mines. Official statistics not being made up exactly to the five-year periods we have been comparing, we will use the 1881-90 figures given in Coghlan's "Seven Colonies," Agriculture.—The total area under crops of all kinds in' Australasia in 1881, was 5,551,513 acres. In the year 1890 this had increased to 7,066,398 acres, showing an increase in nine years of 27.3 per cent., an average increase of 8 per cent, per year. Pastoral Pursuits.—Mr. Coghlan estimates that the total stock in Australasia in 1890 was equal to 242 million sheep against 177 million in 1881, an aggregate increase of sixty-five millions—that is, 37 per cent. It is worth while comparing these figures with those for the years 1871-81, it being understood that they are for all Australasia.

1871-81. per cent. 1881-90. per cent.
Increased acreage under crop 106.6 27.3
Ditto stock 70 37
Ditto population 43.2 34.2

It will be observed that, coming to the years when money was most rapidly borrowed, the agricultural and pastoral industries showed much less expansion than in the preceding years, not page 23 only absolutely, but relatively to the growth of population. We fill pass the separate consideration of dairy and mining, and will come to the question of the value of the productions.

Value of production of the following primary industries in 1681 and 1890, viz,: Agriculture, pastoral pursuits, dairying, mines, forests and fisheries,

1881. 1890. Increase.
£ £ £
New South Wales 20,300,000 26,725,700 6,425,700
Victoria 17,250,000 20,072,100 2,822,000
Qaeensland 9,100,000 12,370,100 3,270,100
South Australia 6,950,000 7,172,900 222,900
Western Australia 800,000 1,391,400 15,900,500
Tasmania 2,920,000 2,778,700 141,300*
New Zealand 13,850,000 15,900,500 2,050,500
Australasia £71,170,000 £86,411,400 £15,241,400

If the production of 1890 had been sold at the prices ruling in 1881 the total would have been £108,261,628, or an increase of £32,091,623. As it is, though the increase in quantity is 45 per cent., the increase in the value of the production is scarcely 22 per cent, against 84 per cent, increase in the population. Pursuing the subject further we find that in 1881 the production equalled £25 per head of the population, and that in 1800 it only touched £28 per head. This is not a very satisfactory exhibit in view of the increase of indebtedness, which, during the nine years, probably reached £180,000,000, the interest on which sum would approximate close to £2 per head.

It seems, therefore, that £2 per head less is being earned, and £2 per head more expense has to be paid than in 1881; facts which must tell with great effect on the margin of profit. It will be seen by the table that New South Wales is far away the greatest producer among the Australasian colonies. The largest production per head is, however, in Queensland; the smallest production per head is in Victoria.

page 24

Production from another point of view, that of exports, may be looked at with profit:—

Value Domestic Produce Exported.

1879. 1890. Increase.
New South Wales 9,966,280 16,956,902 6,990,082
Victoria 7,280,197 7,913,333 633,136
Queensland 3,039,901 8,412,244 5,372,343
South Australia 3,810,567 4,487,175 676,608
Western Australia 447,984 659,661 211,677
Tasmania 1,289,395 1,430,806 141,411
New Zealand 5,563,455 9,428,761 3,865,306
Australasia £31,398,319 £49,288,882 £17,890,5633

The only years for which the figures for this last table have been prepared by Mr. Coghlan are 1879, 1889 and 1890. The earliest and the latest dates have, therefore, been taken. These reports do not agree with the figures given in the Customs returns, except in the aggregate. As regards certain colonies, corrections had to be made on account of produce, often being exported from the ports of a colony adjoining the one of actual production. As far as possible, says Mr. Coghlan, the returns are corrected so as to give each colony the credit due for its own exports. It will be noticed, in the first place, that New South Wales has the same enormous lead in actual exports as in production, and, in the second place, that the aggregate increase of production shown in one table is approximately the aggregate increase of exports shown in the other table. It must be remembered that about one-fourth of these exports were simply exports from colonies to colonies, and of course goods remaining within the limits of Australasia cannot be considered strictly as Australasian exports.

Indebtedness Grown Faster than Population or Production.

From the examination which we have made of the growth of Australasian population and production, it is clear that neither has kept pace with the growth of Australasian indebtedness, This statement seems to be true of every one of the colonies individually as well as of the whole collectively, though of course in a varying degree. While we can give the increase that has page 25 taken place in the amount of the public debt during the past fifteen years for each separate colony, it is a serious, really an impossible, task to estimate with accuracy the extent of the farther indebtedness arising from the large importations of new capital through banks, mortgage institutions, companies, minea, &c. In the aggregate of indebtedness Victoria certainly takes the first place, and New South Wales the second. The enormous importations of new capital into Victoria during recent years make that colony easily first. Still, to estimate closely the respective totals for the two colonies named cannot be undertaken with the data available, and the apportionment among the seven colonies of the £400,000,000, at which we placed the minimum indebtedness to Great Britain, will not be attempted.

Amount of the Yearly Interest on Australasian Indebtedness.

What is the yearly burden of interest Australasia has to carry? Mr. Coghlan says, "There is ample evidence to warrant the supposition that the income of non-residents (of New South Wales) amounts to not less than £3,500,000 per year." It will be remembered that in the second article we calculated that Victoria derived £750,000 a year income from New South Wales properties; if we take this sum from Mr. Coghlan's total estimate, we have £2,750,000 as the interest, profit, income—call it what we will—derived by capitalists residing in Great Britain from private investments in New South Wales. The interest on the public debt of the colony is now fully £2,000,000 per year, Throwing off £250,000 to cover (and more than cover) the small portion paid here, we have £1,750,000 as the sum now being paid away to Great Britain yearly for interest on the indebtedness of New South Wales, making, it will be seen, a total yearly payment by this colony to residents in Great Britain of £4,500,000. On the basis of these figures we can calculate the probable payments by the whole of Australasia, If two-and-three-quarter millions in New South Wales represents the interest, &c., on private indebtedness, and the average were the same for all Australasia, then the yearly interest on the private indebtedness of all Australasia would be a little over nine millions. We are under no necessity to estimate the interest on the aggregate public debts, as we can calculate that to a nicety: it amounts to eight millions. Adding together nine millions on private debts, and eight millions on public, we get seventeen millions as the page 26 sum which must be paid yearly by the four millions of people in Australasia to the capitalists of Great Britain. An estimate was published in Melbourne two years ago, and the figures were pal at fourteen millions interest and three millions income of absentees, making also a total of seventeen millions. The sum may be estimated in another way. We have taken 400 million as the aggregate indebtedness of Australasia; as fully half of this is represented by colonial and municipal loans, on which we know the interest payable, we have other 200 millions of private indebtedness of which the interest or profit is very doubtful Here and there investments are yielding as high as 25 per cent, and some investments are yielding nothing. Probably we should not be far wrong in saying that the average rate on the 200 millions was 5 per cent, which would represent a yearly payment of ten millions, which, with the interest on public debts, would make the aggregate yearly payments eighteen millions. Of tie capital that flows out through private channels a portion, the larger, is actually borrowed or deposited at fixed rates of Interest, and, whether Australasia be prosperous or depressed, that interest must be met. Another portion, the smaller, is embarked in speculative ventures, and the owners themselves carry all the risks, and if nothing is earned then nothing is paid. Of course, also, large sums that have been speculatively employed in these colonies have been lost, but every needful margin of allowance was made for this fact in estimating the aggregate of British investments in Australasia at 400 millions. This sum is supposed tobe an aggregate of something like solid investments: 200 million public, 200 millions private, If times were generally very baa, then there would be a falling-off in the total amount of interest payable corresponding with the portion of capital invested entirely at the risk of the owners, and if such portion amounted to about eighty out of the 200 millions, then the payments would be eight millions on public debts, six millions on private debts, making a total of fourteen millions. Below this total it seems impossible to go. We think we are on absolutely safe ground in saying that the lowest possible minimum payment for interest on present Australasian indebtedness is fourteen millions, and that in actual fact the payment at present being made is somewhere between fifteen and eighteen millions sterling per annum. This is equal to about £4 per head per year for every man, woman, and child throughout Australasia, or the sum of £20 per year for every average family of five persons.

page 27

It is frequently said that the interest payable on Australasian indebtedness is much less burdensome than the interest payable on the British debt, and it is pointed out that we have assets against our debts whilst the British have none against theirs. It is well to look this foolish fallacy straight in the face. Australasia pays away the interest on her debts, Great Britain keeps the interest on hers. As Ave have seen Australasia has to pay—is paying—between fifteen and eighteen millions sterling per annum actual wealth to people on the other side of the world. Great Britain collects from the whole of her people the money required for interest; but she does not send it away; she simply distributes it again, in a narrower circle it is true, but still it is retained, and is available for new enterprises in Great Britain itself. Here interest is a drain; there it is rather i distribution.

* Decrease.