PROVINCIAL TREASURER'S SPEECH IN PROVINCIAL COUNCIL...
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PROVINCIAL TREASURER'S SPEECH IN PROVINCIAL COUNCIL, IN EXPLANATION OF PRINCIPLES OF PROPOSED LOAN OF £500,000.
The "NEW-ZEALANDER," Auckland,
Thursday, February 26th, 1863.
HALF MILLION LOAN.
Mr. Daldy, in moving the second reading of the Auckland Loan Bill, 1863, said he could not but feel that he was taking a great responsibility upon himself as perhaps this might be classed as the most important measure that had ever been brought before the provincial council of Auckland. He should, however, perform his task to the best of his ability, and put forward the views which the government had taken of this bill. His object to-day would be not to advocate the measure, or to press upon the council and honourable members of it, that this particular measure should meet with their favour and acceptance, but to enter to the best of his ability, in a business manner, into the necessity that existed for such a measure,--whether it was wise or not at this time, and likewise to show in what monetary position this province was, how it was circumstanced to undertake a debt of so large a magnitude, and what was the character of the debt as regarded productiveness or the reverse. This was the mode in which he proposed to advocate the adoption of this measure, he thought, that they must first carefully consider the necessity of borrowing money. In the first place, if they looked round them in this province, they found that it was destitute, comparatively speaking, of public buildings. They had not one, he was sorry to say, that could be spoken of with respect as a public building. With regard to the £15,000 debt upon the province, that was not a question of whether they should borrow, because they could not pay it without borrowing, and on the May 1st, 1865, it necessarily became payable.
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With regard to immigration, honourable members were aware that our means of introducing population with that rapidity that was desirable were not so abundant as could be wished and were becoming less every day. We were not acquiring lands in the ratio in which we were disposing of them, and consequently the system now in operation must be very much supplemented. With regard to the acquisition of native lands, it was a question for this council whether they would make monetary provision for the purpose, because the funds in the hands of the general government were nearly exhausted. Therefore it was a matter for consideration whether the province was to continue to purchase at all, because he did not believe the general government would be disposed to borrow more money for the purchase of lands in the province of Auckland, the general legislature last session not having shewn any tendency to interfere with provincial affairs more than they could help. Next, let them consider the period which the government proposed. He did not mean to say that this loan ought to have been contracted sooner, but he said that there had not been during the past 21 years a period so favourable for borrowing money as at present. They found that at the present time, from circumstances which were swaying the whole world, Colonial securities of the Southern seas were rising into importance, and taking their place as steady and fixed securities in the money market of Great Britain, which they were justly entitled to do. Not a mail arrived but informed them that these securities were better thought of by English capitalists, by European he might say, for he knew that a portion of the New Zealand debt was held by French capitalists. These colonies, then, were rising in the estimation of the world at large, as being not bubbles, but permanent institutions that were capable of paying the loans which they might desire to contract. Then, should they agree with him that it was wise at this time to borrow money, they next came to the necessity that existed for it. Well, he thought the necessity must be apparent to every one, but it was his duty to show that there were necessities existing. He thought we were in a position in which he might say that a portion of our mother country was a few years ago. We had a large estate but a very unproductive one--an estate that required improvement, a quantity of waste lands that must be brought under the plough before it would pro-
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duce the necessaries of life; and we had, more especially, at this time some differences of opinion between us and the race which inhabited this land, and these differences of opinion would exist as long as we were in a minority, but we, feeling that we had justice and truth on our side were not desirous of augmenting our numbers that we might oppress that race, but that we might be able to create such a balance of power as would render peace indispensable to all; and if he would press on one portion more than another of the necessity for borrowing money to increase the population, it was that it would be the means, by the introduction of numbers, of peaceably disposing of the native troubles of the province. Well, this borrowing sounded, no doubt, to many ears, a very doubtful thing. There was something in British subjects naturally adverse to it: they did not like borrowing at all. But of late years they had become converts to it to a large extent, more especially were it was for reproductive purposes. Only let them look at the home government itself, which a few years ago guaranteed loans, and also lent them to proprietors of estates, in order that those estates might be made more productive, and that in consequence of increased production the necessaries of life to the people might be had at a lower price. We had an estate unproductive, and he said, therefore, that we had a right to borrow that it might be made more productive. We often had been, and still were taunted that our exports were so small, but that was only a proof that our imports in another shape were very large, because, if we did not receive imports in the shape of money we would not be able to sustain that state of things. But we must make our land productive, able to sustain the population that comes into it; and this must be done by the introduction of large numbers, who should devote themselves to the cultivation of the soil. The principle upon which this loan had been asked for was that it should consolidate all the debts and liabilities of this province, because the government believed it to be a sound principle that small loans were destructive of credit. It was proposed in this bill, whether or not they would be able to redeem certain lands, at all events to include them in this loan, to show clearly to the world whom we deal with that it embraced all our outstanding liabilities of a provincial character. The most important item perhaps that they had to deal with in this matter
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was, what security were they prepared to offer to those who were willing to lend their money? He trusted to be able to prove to the satisfaction of the council that we were in a position to raise the loan, and at the same time not to lay any unreasonable burden on the present or future residents in this country. In the year 1841, the customs revenue collected in the province of Auckland, was comparatively nil; while for 1863, it was estimated by the general government at £100,000, and that estimate was backed up by the fact, that very nearly £90,000 was paid during the past year. Here they had a starting-point on which to found their calculations; and though all the provincial revenue was included in the security given for this loan, still the remainder was of such a diversified character, that he did not propose making any further remarks upon it, saying that it was of that character that with population it must necessarily increase as it had hitherto done; but there was no data upon which they could accurately calculate the revenue arising from fees, fines, &c. Many of them would ultimately become district revenue, but they would then relieve the provincial government from contributing to the districts in the form in which it did now; so that the revenue of the province would not be lessened. In 1853, the date of the introduction of representative institutions into this country, two-thirds of the net revenue, or five-eights of the gross, only produced £6,300. Now this was a period of 10 years from the present time. In 1857, which was the first period in which the three-eighths customs was made provincial revenue, it was £23,500, although this was only three-eighths, while the other was five-eighths, showing a large, and he might say, an excessive increase in the revenue, upon which he did not therefore propose to base any calculation. After that period the surplus revenue also was to be paid monthly to the provinces. In 1857, the three-eighths, not including the surplus revenue, amounted to £23,500, and in 1862, with the surplus combined, to £40,000. (These were round figures taken from documentary realities.) Honourable members would see then that in 1862, there was £16,500 more than in 1857. The total amount received in the last six years was £174,000, while the revenue of 1857, multiplied by six, only amounted to £141,000 the amount which would have been received had the revenue remained stationery from 1857 to 1862 giving a
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surplus of £33,000 actually received, or an annual increase of £5,500. If we maintained the same rate of increase, and after careful examination he knew of no cause existing at the present time why we should not, (even still further increase it, since we were now more numerous and more wealthy than at the commencement of the last six years) till the year 1868, when it was proposed the Act should cease, if the whole sum were not borrowed; but supposing the whole sum to be borrowed within the six years, they would be well able on this calculation to bear the interest of it. With reference to the first section of the loan which included the existing liabilities on the province, £315,000 was the amount of the loan proposed, principally to rest on the provincial revenue, which would require interest amounting to £25,200, which, by deducting the existing liabilities £4,500, they found would increase the liability on the provincial revenue by £20,700, while, as he had already shown, £33,000 would be received from the customs, if even only the past rate of increase were maintained. Therefore, he said, that taking the most extreme view of the case, the interest of the unproductive portion of the loan would be met, and a sum of £12,000 still remain to meet local wants. Having made this general statement, he now proposed to look at the loan in its divisions, and explain the purposes for which they were asking the council's approval. The first item placed in the loan was £45,000, and this became due on May 1st, 1865. Now, as a legislature, it was their duty to take forethought and care that the credit of the province should not be injured in any way, by making due provision for the payment of this £45,000, and it was not too early to speak of it two years beforehand. This loan had been totally unproductive; but the loan they proposed, proposed to redeem itself in 33 years, besides reducing interest to the extent of £900 per annum on that one item. For public buildings they asked the council to loan the sum of £70,000. Many on first view would take this sum to be totally unproductive; but he thought he should be able to show that scarcely more than half of it was so. It was proposed in these public buildings, as it was on a former occasion, to make proper provision for the general government of New Zealand; and that general government would be prepared, so long as it was the general government of New Zealand here, to contribute by payment of rent, or otherwise, the share that was fairly due to the province
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for the construction of these buildings for their use; and in after time, should our institutions become so varied that there was no such thing as a provincial government, but that the North Island stood alone, Auckland would then be in a position to claim her right to the first place among the cities in the Island. But he thought honourable members would agree with him that it was scarcely a question whether they would be willing to borrow so much, but it was a dire necessity that they should no longer allow the lunatic asylum of the province to remain in its present state, or the charge of neglect would justly come home to them. Then, looking at the court-house, all must feel that to call such a building the supreme court appeared a burlesque. It was a disgrace to us, and so more especially was the gaol attached to it, because humanity was concerned there, and not merely accommodation or ease; and were it not for the very great care that was taken in keeping the gaol in a cleanly state, he believed it would be unjustifiable to place prisoners there, where contagious disease might at any time break out for want of proper accommodation, and where prisoners were placed so that they were herded together without any proper government or distribution; and, instead of a reformatory, it became a place of corruption from their necessary associatian together. The stockade was somewhat better. There was more arrangement and more means of accommodation there, but still these were moral wants and must not be wedded with mere monetary consideration. He regarded these institutions (and he might class amongst them the hospital which in the course of a year or two would be too small for our requirements) as subjects which must not be looked at in the mercenary light of whether we should pledge our income for a certain sum of money, for we were bound that these institutions should be in such order as became decency and morality. He might say in passing that it was the intention of the government under any circumstances, whether this loan bill passed or not, to ask this legislature at an early period in some form to make provision for the lunatics of the province for they would feel that they had neglected their duty if they did not do so. He now passed on to the item of immigration. This was the necessity of the province. What form it should take would depend very much on this council. The government was prepared to adopt
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each and every form of immigration that might be considered desirable; because they held it as one of the principal interests of this province that population must be introduced, and in connection with that they believed that population being introduced by the side of public works being carried on was more safe than the introduction of population alone, and that was one reason he would urge why these loans should work together. With regard to the purchase of native lands, he believed, from his experience of the natives during 20 years, from their fickleness and changefulness of purpose, that it was not out of reach of possibility that in a year or two such a change might take place in their minds that they might as readily dispose of their waste lands as in former years. When once the foolish idea of a sovereignty of their own independent of the British rule, passed away (as he believed it was rapidly passing away), and they saw the inutility of keeping those hills and mountains which they could not render productive themselves, it might fairly be expected that at no distant period they would freely place those lands in the market; and such being the case, none desires more than he did that the province of Auckland should be in a position to purchase those lands for the public good. He had advocated the right of the native to dispose of his lands for many years, and he now advocated that this province should hold its position as the largest purchaser of native lands when they came into the market. They had heard much talk about land sharks. He believed they were imaginary animals, but if there were any, he wished that Auckland should be the largest land shark in the province, --make the largest purchases, choose the best sites, and in fact buy so as to be able to map out the country in such a manner as to benefit the inhabitants hereafter. He would now turn to the second distribution of the loan, the £185,000. He might first say, however, that the first portion of the loan had been considered by the government of an unproductive character to some extent. He said to some extent because no money that might be spent in immigration, the purchase of estates from natives, &c., could be totally unproductive. Why could we not do as a country what half of us had been doing as individuals for the past 21 years? Why not make borrowed capital reproductive? That was seldom the case with money borrowed by states he knew, but if they made it only so
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productive as to save the sinking fund to a large degree, it would be highly productive of benefit to the people. On reproductiveness with regard to immigration, he also desired to say a word or two. Take it in its worst view and suppose that they should bring a man here for nothing (and if they reasoned upon that, they would be on the safe side, he thought.) [Mr. Buckland. But could we keep him here for nothing?] That was another question. If they borrowed upon the worst possible system and paid the passages of immigrants into the country, £100 would bring in six adults, or their equivalent. What was the consequence as to revenue? At the present time the whole European population of New Zealand was taxed to the extent of upwards of £4 per head in customs revenue. Such being the case, three-eighths of that, or 30s. a-head was paid by the provinces but this would not be a fair calculation, because they knew that the Maori population contributed in a certain degree to the customs revenue. Putting aside, therefore, one-third, every adult would contribute in the shape of taxation £1 per annum, which in six years would give the interest without the sinking fund; but if it were passed, as proposed on for a period of 33 years, what was the result then? What would be the natural increase of population--births over deaths (which was very large in this country)? What would they produce in the last 10 years of the loan? Why, this item would repay interest and sinking fund before the principal would have to be paid. But they were aware at the present time that there was a stream of emigration going out of the mother country by thousands who were desirous of seeking a home, and who were turning their attention to the southern hemisphere. By making advances to these, and giving them time for repayment, they might be able to devote a portion of this sum to the benefit of those who might come, and still more to the benefit of those in the country. The other £100,000 of the £315,000 was really a tax upon the present community. The remaining sum of £215,000 might be reproductive and meet its own interest and sinking fund. For a time it might not do so, but if that borrowed for the purchase of native lands was not productive at first, they would have a fixed capital in those lands which represented the money they had borrowed. He would now turn to the second portion of the loan, the £185,000, which the government looked
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upon as totally reproductive. It was proposed that £60,000 of this money should he secured on the harbour property of Auckland. Members were aware that at the present time there was a debt upon it of £25,000, which debt was not in the same form as the city debentures, but in the form of mortgage, which tied those properties up in such a form that they could not be used profitably for the benefit of the harbour or commerce of the province. They could not grant leases for a long period, or borrow further money upon the property while that loan rested upon it. This loan must first be redeemed. Honourable members would recollect that this loan was raised under extreme circumstances and extreme difficulties. He was present at the passing of the loan bill by the general legislature of the country to relieve this province from difficulty. He had not at that time fully foreseen the difficulties which would accrue from the way in which the loan was raised, nor he believed did the gentlemen who proposed it and brought it through the council. There was a sum of £12,000 due from the harbour to the province, and a debt of £37,000 on the harbour He was happy to say that from the increased rates that had been ordered (and which rates were still far below those of other ports that he could name), and other dues, this trust would be in a position this year to pay its interest, sinking fund, and cost of management, and provide a sum for its repairs. Therefore, this property which they proposed to borrow money upon was in a safe position, as being able to meet its liabilities at the present time; and with extended commerce and extended improvements, it would be able to meet the increased liability when requisite. The charge now upon the harbour was £3,210, including the interest on the sum due to the province; and the increased charge was £1,840, at the end of six years. Now, it remained for them to consider, was this too large a sum to borrow against a property of the character and description that this was, and he thought they would join with him in saying unhesitatingly, No, that property was able to represent two or three times the amount. They knew very well that during the past twelve months, allotments adjoining that property had changed hands at the rate of £50, £60, and £80 per foot; and some in the vicinity were now valued at £100 per foot; and yet the largest portion of this property of theirs was unavailable for the use of the
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country from the position in which it was placed by this mortgage. The city loan which they proposed was a sum of £50,000. The present loan was £15,000, and this was in a very excellent position, because one fifteenth of the amount, or about £1,000, provided by the sinking fund had now accrued, and the property let was producing a larger amount by £200 annually than the interest of the debt. They proposed to increase the interest to be laid on in six years by £2,800, in consideration of the sum of £35,000 being expended in improvements in it, and would any gentleman say that the city of Auckland property was not able to bear this, and that if the sum of £35,000 were spent on it in improvements, water supply, drainage, market place and other necessary buildings that the wealth of the city was not sufficient to bear a tax in all £4,000 per annum in return for that expenditure of money. He hoped to see the day shortly when the city of Auckland would not need to come to the provincial council for any votes at all. (Hear, hear.) The city in fact, must take example by the country districts which were now so freely forming and rating themselves to contribute to their improvements; and so they in the city would cheerfully tax themselves for the necessary improvements that they required. He thought no question would arise as to the expediency of raising this sum for six years on the city of Auckland; the people of which he believed were quite prepared to accept the responsibility for the sake of the advantages of it. He now came to the last item in the bill which was £75,000 for public works. He believed that if judiciously used, and that remained with the council and not with the government, this might be the means of opening up the province to a larger extent than they could possibly conceive at the present time. It would also encourage the out districts to undertake works of which without it they would never have dreamt; and so make communications between the various settlements more rapid, thereby decreasing the cost of the necessaries of life. He believed that no portion of the loan that was asked for would have a more beneficial effect upon the province generally than this £75,000. It would be a peculiar trust placed in the hands of the council, and it would of course bo their duty in regard to this loan, to see that no imaginary undertakings were entered into (hear). In fact, he thought, that whatever works were proposed to be undertaken,
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they should be done by application to the council in the same way that applications would be made for a railway, with data produced to show that the work would pay, and that there was sufficient security for the money advanced. Why should not the council advance sums of money to districts for the erection of bridges of large character, and other important works? He did not think there would be much dissent as to the wisdom of this portion of the plan; and it would further, tend to relieve the provincial revenue from a very considerable burden; for when there was any provision made by which capital could be raised for works, it was very natural that the difficulties usually found should be overcome in a very efficient manner, saving a continual drain upon the provincial revenue, such as was caused by the miserable punt at Panmure, for which, perhaps, we were paying nearly as much directly and indirectly as would cover the interest of a sum of money that would pay for building a good substantial bridge. It was not his purpose to enter at length into this; it was a plain business matter. There remained now only one or two other items which he would draw their attention to. He felt that in the first year or two of the borrowing of the money, there would be more difficulty in providing the interest than when the reproductiveness of the loan had become more apparent; but he thought he could show that provision was made for that. The £12,000 to be returned from the harbour to the province, would provide for the sum proposed to be raised in the first eighteen months. Then, with regard to the loan to the city, if this loan were purchased up at a slight advance, still the sinking fund that had accumulated would meet any difference of value in the debentures, and that sinking fund would then become available as the savings of the city for a certain period, and might fairly be used in the payment of interest for the money they had borrowed. There was also a small sum of £500 sinking fund belong- to the harbour, now in the hands of the provincial government, which would contribute in some measure to the payment of the interest on that account. He had now put before them the whole question. The provincial government had come to the council with what they believed a measure calculated to influence its destinies for many years to come, and to produce results beneficial to those over whom they were placed; but they had not
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come to the council with any desire to take upon themselves the responsibility of this act. They had done it as their duty, and from a firm conviction of its utility, they had placed before the council this measure, but it was not their intention in any way to endeavour to influence the minds of members of the council with regard to this loan, or to do anything that might be looked upon as having a political tendency. The act if done would be done by the council, and certainly those who performed the act, would have the credit as well as the responsibility of it; and he trusted that upon this principle the government would ever come before the council. Honourable members would see that special provision had been; made by which no large sums of money could be be exclusively at the command or discretion of the government. No sums indeed, could be devoted to any purpose without the full and mature deliberation of the council, he looked upon it as one of the best provisions of the bill that the money must be lent by act. He did not know that there was anything more to be said in regard to this. He had endeavoured to the best of his ability to study this measure, and should be most happy if it went into committee to afford every information in his power. He felt a common interest in the bill with other members, but he had made perhaps more search into it than them, and everything he knew was perfectly at their service. He wished the council fully to understand that in the event of the bill meeting with their sanction, the government would be prepared immediately to repeal the act passed last session to raise £60,000 on debentures for the erection of public buildings. The government's great aim and object was to concentrate the whole of the liabilities of the province into one loan, so that any one might at any time see what the liabilities of the province were. He now moved the second reading of the Auckland loan act, 1863.
Mr. BUCKLAND thought the subject required a little ventilation. He did not intend to say anything at present, but would like the debate to be postponed at this stage, in order that members might have an opportunity of seeing the statement they had just listened to in print.
Mr. DALDY agreed to the honourable member's suggestion. He was glad to have the matter as fully ventilated as possible.
The debate was accordingly adjourned.
