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Conclusion of My Recollections--Remarks on the Finances of New Zealand--A General Resume.
In bringing my recollections to a close, not for want of material to continue them, but rather for fear of exhausting the patience of those who may have read them so far, I will venture to add a few remarks with reference to the present and the future.
The high prices of our produce for some years past have produced a condition of wealth and general prosperity undreamt of a generation ago. It may seem ungracious and unnecessary to ask: "Is all well with the country?" and yet the persistent and unheeded warnings of bankers, politicians and others for some years past may well give reason for misgivings.
A large annual, external loan is now accepted as part of the settled policy of the country. One of £7,000,000 for the current year (1925) has recently been floated in London, under circumstances that do not appear encouraging for the future. The expenses connected with such loans, viz., discount off par value, commission to underwriters, exchange, etc., absorb an appreciable proportion of the entire loan, so that the country really gets, year by year, a large sum less than it will eventually have to repay.
Our national debt on 30th June, 1924, is officially stated as 208 1/2 millions. That of local bodies at the end of 1923, exclusive of loans made from State funds, at over 38 millions. The sum required to pay interest on the State loans, to lenders outside the Dominion, is about 5 millions. The trade balance in our favour, excess of exports over im-
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ports, for the past statistical year, was somewhat under this amount. These figures do not take into account the sum required to pay interest on loans contracted by local bodies.
It is important to remember that the value of our exports to 31st March, 1925, nearly 48 millions, would at pre-war (1914) values have been only about 29 millions. Moreover, the volume of exports is not increasing to the extent it should. The great increase in value is mainly due to abnormal prices. I remember, at the inception of the export trade of food products, farmers saying that their position was assured if they could depend on 9d per lb. for butter. To-day with butter at double that price it is disquieting to see that farmers head the list of bankruptcies.
Our exports are yielding higher prices than the most optimistic would have ventured to predict a few years ago. Can we reasonably expect such prices to continue? Should values of colonial produce, always liable to sudden and violent fluctuations, revert to what may be termed normal, may we not be faced with embarrassing conditions?
The effects of the return to a gold standard have yet to be ascertained. It would seem probable that deflation of our monetary system will tend to increase the purchasing power of money and correspondingly reduce the price of goods. However this may be, it is certain that we must accept the world's prices for our produce, be they much or little, whilst the payments for interest on our borrowed money remain inflexible. The huge sum required to keep faith with the public creditor must be won from the soil. New Zealand is not primarily an industrial country. In the nature of things it can hardly be expected ever to do more than supply its own requirements of manufactured goods.
The enormous increase in the price of land within the last few years is a matter for serious consideration. The best land of the country has passed into private ownership, and in naming selling prices little or no regard is paid to its real economic value.
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THE THREE IMPS
H. B. MORTON PHOTO
YOUNG MAORI MOTHERS
H. B. MORTON PHOTO
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AUCKLAND IN 1925
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The land in the possession of the State, or of Maori owners is, speaking generally, poor--a great deal of it worthless for agriculture. True, much of the poor land is capable of improvement by scientific treatment. This, however, assumes the possession of substantial capital, and it becomes a question whether it is worth while to take up virgin land which must be properly manured before it produces, and manured continually if it is to remain productive. Whether, in fact, the holder of such land can ultimately compete with countries whose virgin soil is naturally productive.
We are thus brought face to face with a serious problem in connection with the rising generation. Young men in search of a career find the professions overcrowded. Rigid trade union rules limit the opportunities for learning a trade. When they turn to the country they find that to attempt to pay the price demanded for good land spells bankruptcy and to break in poor land successfully requires substantial capital. In many cases they have given up the attempt and so some of our best young men have gone to other countries. The Straits Settlements, the Argentine, Canada, Australia, India--all have their quota of young New Zealanders, and New Zealand is the poorer for their loss.
Our population is rapidly becoming more and more urban. To quote the words of the Official Year Book for 1925: "The increasing proportion of urban population in recent years is plainfuly manifest. It is noteworthy that the 'urban drift' either non-existent or quiescent up to 1906, in that year commenced a swift rise, which is apparently gaining in momentum." The cities and towns are becoming more and more congested. Our newspapers record with jubilation their rapid growth. They should rather regard it as an unhealthy sign of the times. How half the people live is a mystery. It is a matter of surprise, even to those well acquainted with local conditions, to see the number of well-
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dressed men who throng the street corners of the large towns and who apparently, to use a homely phrase, "live by their wits." Land jobbing and betting on horse-races offer part of the solution.
The evils of overcrowding are already apparent. People are living in conditions favourable neither to morality, health, nor self-respect. Children are too often regarded as an incubus. Many landlords refuse to let their rooms or houses to persons having families. It would naturally be inferred that the population of the Dominion was increasing rapidly. Such, however, is not the case. As I have already remarked, the natural increase is little more than half the ratio of a generation ago. The congestion is mainly due to exodus from the country to the towns, and to immigration.
There are two undisclosed sources of income which must not be ignored. A considerable number of persons who have acquired wealth, or become entitled to pensions, in other countries, come to New Zealand to pass the evening of their lives. The tourist traffic, a steadily growing one, is also a source of income to the country. Both are satisfactory up to a certain point. But valetudinarians and trippers do not add to the virility of a young nation. They tend rather to the growth of a servile class to minister to their wants and cannot compensate for the loss of our young manhood.
It is common knowledge that a large area of the improved land of the country has for various reasons gone out of cultivation and been allowed to revert to native scrub and fern, or, worse still, to blackberry.
The Minister for Lands recently appointed special committees to visit certain districts in the southern part of the Auckland Province. Their report has been published, and is of great interest. They estimate that nearly a quarter of a million acres have so reverted within the districts on which they report. They give in detail the causes to which
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they consider the trouble is due. These may be reduced to two main reasons, viz., lack of capital and the want of roads.
Unfortunately the evil is not confined to the North Island. The moist climate of the West Coast of the South Island especially favours the spread of the blackberry. I have observed large tracts of cleared forest land in that locality of which it has taken complete possession. The same remark applies to large areas of pumice land owned by the Crown or by Maoris in the thermal district of this island. One Auckland firm of fruit preservers purchased no less than 30 tons of blackberries gathered last autumn in the neighbourhood of Ngongotaha and a similar quantity in the Nelson province. The pest has taken possession of the country, and appears ineradicable. The large reward offered by the Government for its destruction has so far produced no result. It is one of the most serious problems which the country has to face.
In spite of the variety and complexity of the problems which the country has to meet, we may approach them in no spirit of pessimism. Our economic position generally is a reflection of the Great War. War expenditure, necessarily lavish and often reckless, has left in its trail a spirit of profiteering--if I may be allowed the use of a clumsy but expressive word. The scale of commercial and banking profits has risen, and the standard of expenditure, public and private, has reached a dangerously high level. Should reaction overtake us I have, however, no fear for the ultimate prosperity of New Zealand.
If it results in a simpler standard of living, a general spirit of thrift and the use of fewer imported luxuries, the effect, although it may entail considerable individual inconvenience and even suffering, will certainly be for the eventual benefit of the country. Work and thrift made New Zealand what it is. The same qualities will insure its future prosperity.
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We are privileged to possess one of the pleasantest and most desirable lands on the surface of our planet, a land possessing every variety of scenery, considerable mineral resources, and a salubrious climate suitable for the growth of a healthy race of men and for the abundant production of man's primary wants.
May the coming generation prove worthy of so splendid a heritage. May they realise that the Ancient Book which, though old-fashioned, can never be out-of-date, since it deals with eternal verities, has declared that "Righteousness exalteth a nation."
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