1875 - Carter, C. R. Life and Recollections of a New Zealand Colonist. Vol. III. [NZ sections only] - CHAPTER XXXVI. A CONTINUATION OF AN HISTORICAL SKETCH OF NEW ZEALAND LOANS, p 389-406

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  1875 - Carter, C. R. Life and Recollections of a New Zealand Colonist. Vol. III. [NZ sections only] - CHAPTER XXXVI. A CONTINUATION OF AN HISTORICAL SKETCH OF NEW ZEALAND LOANS, p 389-406
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THE foregoing pages on this subject were written and printed in the year 1874. At first I thought that I would publish them at once in the form of a pamphlet. For various reasons, which it is not necessary to name here, I did not do so. However, I confess to being influenced by one reason. That was, that after the Colony had been legally committed--by its representatives in Parliament--to Mr. Vogel's gigantic Public Works scheme based upon loans, I considered it unwise to make statements calculated to damage, even to a small extent, the credit of the Colony. I thought it but right, under these circumstances, that his policy should have a fair trial.

Well, twelve months and more have elapsed since the time I have just alluded to; and has borrowing ceased, or has the projected and promised 1010 miles of railway been even half completed? The answer must be "No." When the session of 1874 met, only 89 miles were open for traffic, and 57 ready for it.

Since then considerable and important progress has been made in both road-making and railway construction, but not commensurate with the rapid increase of the public debt, which is increasing with such amazing velocity that--in view

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of the near-at-hand elections for the House of Representatives. --I think no honest man, no bona fide Colonist who must bear the impending burden of taxation, should hesitate by his pen, his voice, or his vote--to protest against the continuance of a policy of borrowing so hollow, so reckless, so rotten and so utterly regardless of consequences and prudence-- as that initiated, fostered and mainly fastened on the Colony by one man, and that man, not long ago Mr., but now Sir Julius Vogel.

The appearance of Sir George Grey in the political arena in Auckland at this particular juncture should be hailed with satisfaction. As a true and tried friend to the Colony he is worth a dozen Vogels. He can be trusted. His suggestions are entitled to our highest consideration; and even if some of us do not entirely agree with him on Provincial topics--his opinions, on these matters, will still command our respect.

Before entering further into my continuation statement, let me here pause to say that I think it but right, as I have given expression--in the first part of this pamphlet--to certain opinions and suggested certain partial results as the fruits of Mr. Vogel's policy, up to 1874, that I should now briefly refer to one or two of them, and see how far they have been borne out by facts which have since occurred.

At page 35, I state that at the time the General Assembly meet in 1874 "the total public debt of the Colony would reach the formidable sum of £12,500,000." The actual amount stated by Mr. Vogel in his financial statement of 1874 was, £12,509,546.

At page 44, I express an opinion that thousands of immigrants might be landed in N.Z. during the winter of 1874, and that there might not, under the then ordinary circumstances of the Colony, be plenty of work and high wages for them, and some of them might even leave the Colony.

When the Government saw the mess they had made by introducing, in the depth of winter, a deluge of immigrants, they

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certainly made great exertions, and by conveying the immigrants into the interior, and by finding them employment at high rates of wages they mitigated their helpless condition and prevented them from raising the cry of want of employment, and thus paralyzing the exertions being made at home to induce extensive emigration to New Zealand. But at what a lavish expenditure of cash this was effected, and as it has since been continued, it has now become a great financial difficulty.

Notwithstanding these exertions and the silence of the greater portion of the New Zealand press, there was as I suggested there might be, discontent and a lowering of wages amongst the immigrants with whom the Colony was flooded during the wet winter of 1874, as the following extracts from English and Colonial newspapers, which have been forwarded to me, prove.

First, let me quote the report made for the month of August, and sent by the Emigration Agent at Canterbury to the Government at Wellington. It was as follows:-- "The large number of mechanics and tradesmen who have arrived during the last three months has been in excess of the demand, and the consequence has been that a number have been put on temporarily at labouring work. The wages being 5s. per day, and the men not fitted for the work, some discontent has arisen." The italics are my own, and are significant of carpenters being paid 5s. per day when they were led to expect 10s.

The following is an extract from a letter in the "Canterbury Weekly Press" of July 18th, 1874.


To the Editor of the Press.

"SIR,--Would you kindly insert the following 'the cry of Christchurch;' what is the cry that you hear as you walk through the streets of the city? It is, 'Have you got a job

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yet? and you have no need to stop to hear the answer, 'No!' And what is the cause of this cry? Why, the overflow of immigrants; and so that some [same] cry will resound through the streets while things go on as they are."

Below is an extract from the London "Building News."

"NEW ZEALAND.--A correspondent and subscriber writes to us advising intending emigrants to New Zealand in the building trades to stay at home. He says carpenters and other mechanics are glad to be allowed to work on the roads at five shillings a day. Since the last ship arrived wages fell two shillings a day, and (Aug., 19) two more ships are shortly expected. Provisions are very dear, and people are worse off than those at home."

I give, under, a portion of a letter that appeared in another English paper:--


To the Editor of "The Oxford Times."

"SIR.--The following extract from a New Zealand letter, (dated July 26th, 1874) coming as it does from a well informed and thoroughly reliable source, conveys a serious warning to agricultural labourers intending to emigrate. For their sake I would wish it to appear in your columns.

"Your obedient servant, A. G.
"Nov. 3, 1874:

"I have been expecting to see some one from the country round Oxford among the numbers of immigrants coming in every week. We have had nearly twenty thousand landed in the Colony during the past six months, and one or two ships were to bring the Union men from Oxfordshire and Warwickshire. More than 800 have come into Lyttelton the last week, and there were some hundreds before being fed and maintained by Government, for there was no work to be had, and what they will do I cannot think. It is very badly managed. If these numbers had been spread over two years it would have been all right, but to pour thousands of labourers into the country in the middle of winter where

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there was not labour to be found for many that were already here seems to me like madness. I feel sorry for these poor creatures as we pass by the Barracks and notice their wretched looks."

I quite admit that the above state of affairs was confined to the winter of 1874, and that since then the immigrant labour in question has been absorbed--by throwing open as many public works as possible, and borrowing and spending money in vast amounts in a wasteful manner, and, as I say at page 45, this inflated prosperity may be continued yet longer if yet more large amounts of borrowed money are forthcoming. The Colony ought to know the number and cost of the labouring men now employed on public works by the Government, and by Government contractors and sub contractors. A return of this kind would be exceedingly interesting, as showing how fast the borrowed money has been going since the session of 1874.

At page 46, I say that by the end of the year 1878, our Colonial and Provincial debts will amount to £17,000,000; already in 1875, they are sixteen and a half millions, and the annual interest is nearly £950,000. I see now that at the end of 1878, our debt will be at least £18,000,000.

Specially I wish to confine myself to our Colonial debt. This at the Financial year 1874, had grown up to the tall sum of £12,509,546, requiring an annual amount for interest and sinking fund of £777,796 4s. 10d. Our Parliament of 1874 decreed that four millions sterling more were required and must be borrowed.

"That will last us four years," said some discreet persons; "perhaps a million a year will be raised," timidly remarked others; but Mr. Vogel had his own idea of what was best for himself if not for the Colony. He loves big ideas and big figures, and he wanted to go home, his strength was over-taxed, his health was failing; but nothing but the foggy atmosphere of London seemed likely to suit his complaint.

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No one doubted his having worked very hard and his requiring rest to recruit his health; but very few persons thought a journey to England needful for that purpose--particularly when his Public Works scheme was in full swing and approaching a crucial test. Still home he would hasten, and there was an end to it. The Captain would leave his ship--when she was in danger--to the charge of the crew, and there was no one to prevent him doing so. Go he would, and go he did. He had decreed it, and who was there to oppose it? The handwriting was upon the wall. The finger of Mr. Vogel had traced it, and no one dared to obliterate it.

So Mr. Vogel departed for England with the Colony at his back, the bank of New Zealand round his neck, a carte blanche in one pocket, and a bill for four millions sterling in the other. He duly arrived in England towards the close of the month of January, 1875. At this time, I am informed, and I am sorry to say, he was suffering from a severe attack of gout.

When Mr. Vogel was in New Zealand he held three portfolios. He seemed partial to the number three. He introduced several loan bills: the last one he called "number three." It was for four millions.

In London he arrived with a private secretary for himself; he also took home another secretary for the Agent-General. The latter, I believe, had already a private secretary in his office. Thus Mr. Vogel made up his magical number three. His own private secretary was, no doubt, indefatigable in finding him information, and was very useful in feeding certain London and New Zealand journals with matter explanatory and laudatory of the great things his Master did for the good of the Colony. I don't remember either Mr. Wood or the Hon. W. Fitzherbert being allowed private secretaries when they went on monetary missions to England. And I certainly do protest against any New Zealand Minister having such close relations with the press, as Mr. Vogel has had. To me, it appears most

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unconstitutional and corrupting in its influences. More than this, how can we fairly forbid other gentlemen in the Civil Service of New Zealand from communicating articles or information to the newspapers--if their Superiors are permitted to do so?

One would think that the gentleman whom Mr. Vogel selected and took home with him as Secretary to the Agent-General's Establishment in London, must have found his appointment a most unnecessary one, though it cost the Colony £800 a year; and he must have arrived in London at a time to find, as the result of past experience, the offices in good working order; but, that in both the Public Works and Emigration department, there were signs of a coming to the end of their work--for the great bulk of the emigrants ordered had been sent out, and, I am informed by a high authority, the greater part of the orders for plant and material was executed. This is but another instance how dearly the Colony has to pay for the whims of one man who fancies he is a statesman-- when he is only a Borrower and Spender of Money.

Perhaps Mr. V. wished to establish a sort of double-headed London Agency--a large head and a small one; a sort of double-barrelled-gun arrangement--with a long barrel and a short one; if he did, from a mental and physical point of view, he succeeded admirably.

I have here to chronicle the year 1874-5 as a very happy year for New Zealand. There were no Native disturbances, no political fighting, and no want of money: the supply of the latter was very abundant; still it was hardly sufficient to meet the demand for it; but this was easily remedied by Mr. Vogel's appeal to the London money market for four millions sterling, and the cities Auckland and Dunedin's successful applications to the same quarter for several hundreds of thousands. Add to these brilliant feats of borrowing, that the Bank of New Zealand started agencies in Melbourne and Sydney to tap the golden treasures

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of Australia--my readers will be apt to believe that New Zealand had become, not exactly the money market of the world, but a market in which money conld be disposed of more readily than in any other. Boys and girls will long remember this happy era, for it was the year in which Pa's and Ma's increased the number of their servants, and invested in four-wheelers. Labouring men will find comfort in thinking of a shilling an hour as fair pay, and mechanics at twelve and fourteen shillings per day of eight hours will do the same. Some Provincial Governments were not behind the age, for they were pleasantly employed in anticipating the future by getting rid of the public landed estates, and spending the proceeds as quickly as possible. The gentlemen composing these petty Parliamentary Governments--the champions of Provincialism--have had the good fortune to be in possession of a well-stocked shop, and they have been adroitly employed, in selling off their goods in order that their successors (their constituents) may not have the means wherewith to pay future rent and taxes.

In discussing the policy of Mr. Vogel's second, and, let us expect, his last mission to England, it must be kept in mind that he had always great ideas in his head. There was one idea bigger than all the rest. It was the four-million loan idea which he had got passed by the New Zealand House of Commons; but there was yet a greater and grander idea to be achieved. His rule in our Colony had been long and triumphant--it might not last much longer, and why not do the biggest of the big things he had yet done and crown his New Zealand loan edifice with a gold crown; a crown weighing nearly 84,000 pounds troy weight, and worth about four millions sterling? So he went home to do three things--raise a great loan, negotiate for a new mail service, and contract for laying a submarine cable between New Zealand and Australia--all of which important services he accomplished

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--their advantages have yet to be proved--but all of which, the public well know, it was part of the business of our Agent-General to do, and all of which, I say could have been done with much more honour, credit and profit to the Colony by Dr. Featherston (in conjunction with the Crown Agents for the colonies) than by Mr. Julius Vogel.

It would seem that when Mr. Vogel had been a little time in London, he had made up his mind to dispense with the services of two influential gentlemen--the Agents for the Crown Colonies, who in negotiating all our recent heavy loans have acted for the Colony so well and economically-- as principal agents for floating any portion or all our Four Million Loan.

No doubt Mr. Vogel consulted the Crown Agents and the Agent-General. Still the result was the former gentleman had his way, a contractor of his liking was found, and then Stock Exchange tactics and workings began as follows:-- On the 24th of February, 1875, fhe city article in the Times contained the following announcement.-- "We understand that a leading financial house will introduce a New Zealand loan for about £4,000,000 upon this market at no distant date." On the same day New Zealand consolidated 5. p.c. bonds were quoted at 104 to 105 and our five-thirties 4 1/2 p.c's at 96 to 97. On the next day, the 25th, the same securities, and in the same order, stood at 103 to 104, and 95 to 96. The money article of the Times of the 26th put forth a more important statement. It was as follows:-- "The contract for the New Zealand Loan was signed last night with Messrs. Rothschild. It is, we believe, to be a 4 1/2 per cent, loan, issued at or about 94." During the 27th our 6 p.c. bonds fell one per cent, and the five-thirties receded 1/2 and were quoted at the lowest point reached, viz. 94 1/2. The evening papers of the same day contained the advertisement calling for tenders for the four million loan at 94. The Times of the 1st of March gave a precis of the

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prospectus of this loan in the following terms. "The prospectus of the New Zealand Immigration and Public Works Loan for £4,000,000 nominal has been issued to-day by Messrs. Rothschild. As we stated two days ago, the issue price is £94 per cent., or £93 if the whole bond is paid up on allotment, instead of in the six instalments." The prospectus stated that the subscription lists would be open on Monday, March 1st, and closed Tuesday, March 2nd. The Times of the 3rd made no statement as to the total amount applied for, but simply said, "The new issue was very firm at 1/4 premium;" but it was understood that the whole of the loan had been liberally subscribed for. The terms on which it was offered were simply these.--The price of each £100 bond was fixed at £94 and a discount of 5 per cent, per annum was allowed on all instalments paid in advance, and as it is known that by far the greatest portion of the whole loan was at once paid up in full, this transaction at once reduced the price to nearly 93. The reduction did not stop here, for there was the contractor's commission of two per cent, to be deducted, which expensive operation completed, left the price reduced about 91. It was understood that the great and respectable Financial House of Messrs, Rothschild took the loan "firm," that is they guaranteed that the New Zealand Government should receive 91. At the same time it was reported that they had sold portions of it to subcontractors at a lower price, which really meant that they had "sub-syndicated" it at 92. Probably owing to this "subsyndicating" a quotation in the daily lists was, at the time, refused to the loan by the members of the Stock Exchange Committee, which action depreciated its value, made it unfortunate for the investors, and gave this great loan transaction an aspect one cannot contemplate with satisfaction. Besides, it is the first time that a New Zealand loan, of over a million sterling, has been taken out of the ordinary agencies for floating the same: and when New Zealand Colonists read the recent discreditable

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disclosures made before the Foreign Loan Committee--as to the relations between some loan contractors and the persons who introduced loan schemes to them--they will probably want to have full and complete information respecting the preliminary proceedings and completion of the four million loan contract--which no doubt Sir Julius will willingly furnish.

It is not right, it is not sound policy to be selling our loans to any contractors. It looks too much like following the bad example of semi-bankrupt states like those of Turkey, Spain, Egypt, and nearly all the South American Republics.

On the other hand, it may be said the price obtained, 91, was not a very low one--as the money must be had at once. This latter reason, to me, does not appear to have been the case, but at all events it is quite apparent that the market was taken by surprise and forced with a great New N.Z. Loan.

Again, the whole of the instalments were paid into one bank. Was this prudent? and as we are now paying 5 per cent, for the great paid up portion of the loan, and on an average are likely only to receive 2 for its use, will any of Sir Julius Vogel's supporters affirm it was a profitable transaction, It was simply the fruits of borrowing money we did not want and could not use.

But what concerns us most is the results of the Loan. Let us examine them in an impartial spirit. Let us critically submit the loan-figures to a scrutiny and see what credit or discredit is due to our Financial Negotiator and Premier.

According to a printed report of a statement made by Mr. Vogel during the session of 1874, the million and a half (borrowed in 1874) was offered to the public in London at 98, but with allowances, deductions andconcessions it netted only £95 14s. 2d. Now is it not fair to assume that this testing of the market made our £100 4 1/2 per cent, bonds worth £95 14s. 2d. and that if we had asked, say, for only two millions, we might have

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obtained them at one per cent, less or rather say 94 1/2; and having abstained from further borrowing for twelve months, we could then have easily obtained a similar amount of two millions at the same price, or at all events 93?

But a contrary policy was pursued by our principal Financial Agent. The investing public, brokers and holders of our bonds were startled by the boldness, it might be termed audacity, of a population of 330,000 persons proposing to raise a loan of four millions sterling in one year. On good authority I am told that an eminent City Broker asked, "Why, will two millions not do for you?" The answer was, in effect, "I must have four millions." This was conclusive. The flotation of the four million loan was effected at a price far below what might have been obtained if it had been divided into two equal parts and a year had elapsed between the raising of the two.

I will now, briefly, endeavour to show the loss the Colony has sustained by the way Mr. Vogel raised the loan in question. I appraise its value at £94 the £100 bond.

In the first place the Bank of New Zealand will probably have, on an average for one year, a sum equal at least to £1,000,000 to invest in good bills or what they like on their account. For the use of this large amount, I understand they are to pay the Government the current bank rate less 3/4 per cent, allowed them as their commission (which is rather low than excessive); consequently with the bank rate at 3 1/2 the Colony will be paid 2 3/4, at 3 it will receive 2 1/4 per cent, and at 2 it will nett only 1 1/4 on money it has borrowed at 5. This, I think, will show a loss of, say, 3 per cent., equal to £30,000.

Then as the loan should have brought 94 but was sold to yield 91--there is a second loss of £120,000, and an increase in the annual charge for interest of about three shillings per cent.

The general result of the transaction is more glaringly

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unsatisfactory; the Colony wanted £4,000,000, but is obliged to submit to a discount of nine per cent, and gets only £3,640,000.

More than this, each £100 bears interest at the rate of 4 1/2 per cent, per annum: but the interest the Colony has to pay on the amount it actually received, viz. £91, is £4. 18s. 10 3/4d. or say £4 19s.--nearly 5 per cent. Besides this annual charge for thirty years (at the expiration of which this loan must be redeemed) there will be a bonus of £9 to pay to make up the difference between £91 the sum lent and the £100 to be paid at the end of the term just named. This £9, spread over thirty years, is equal to a yearly payment of six shillings, which added to the interest, £4 19s., makes a total of £5 5s. as the real annual charge on Mr. Vogel's loan of four millions sterling.

The following recapitulatory statement shows the results of disposing of a four-million loan at £91 and £94 for each £100 debenture.

At 91, the total yield would be......... £3,640,000
" 94 " " " ......... 3,760,000
Difference 120,000

At 91, the annual charge, for interest, on each £100 would be £4 18 11
" 94 " " " " 4 15 9
Difference 0 3 2

At 91, the annual bonus on each £100 for 30 years would be £0 6 0
" 94, " " " " 0 4 0
Difference 0 2 0

The above calculation indicates--

Firstly, a totalloss of principal amounting to £120,000 0 0
Secondly, an increase in the annual interest of 6,333 6 8
Thirdly, " " " bonus 4,000 0 0
Fourthly I may add the probable loss on the London investment of the four millions sterling, as, say,-- 30,000 0 0

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Probably Sir Julius, not being a cautious man, did not trouble himself about the future value of money on the London Stock Exchange. He did not contemplate that, in August 1875, the Bank rate would be two per cent., that the amount of coin and bullion in the Bank of England would be £29,393,000, a sum greater than was ever known to be lodged there, and that, of money, there would be a glut instead of a scarcity. If he did anticipate these results he was foolish to ask for four millions all at once, and also in a hurry and a state of flurry: if he did not it is a sad proof of how completely he failed to estimate and gauge the future of the London Money Market as it developed itself in the year 1875.

At the end of the pamphlet I ask, "Is Mr. Vogel to be knighted for this?" the answer has come, "that he has been knighted." And it now but remains for his faithful followers and ardent admirers to subscribe money and cause a statue to be erected to perpetuate the memory of the great things he has done for New Zealand, and more particularly for himself. If they are grateful and do have it reared, I trust the memorial of departed greatness may be a classical one; a sort of "Apollo Belvedere." Suppose it is made to represent him as he appeared pulling a bow at one of Governor Bowen's archery meetings; and on the pedestal is inscribed:--


Sir Julius was a considerable time in London before he was made a Knight: on the best of authority I am informed that great pressure had to be used to secure it before the celebration of the Queen's birthday took place.

At all events Sir Julius went on the Continent at the end of June last. Perhaps to air his title, in the company of petty German Dukes, at celebrated German watering places like those of Wildsbad and Homburg. I do not object to even this: but

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in the meantime his colleagues and the general assembly were seriously inconvenienced by his unexpected absence, for it was of vital importance that he should be in the Colony to make his financial statement in last July, or even August or September.

Had he not been permitted to go to England this would not have occurred. I feel perfectly humiliated when I think how this man has been able to rule, use and trifle with the people of New Zealand, who have hitherto borne a high character for prudence and intelligence. When will the Colonists open their eyes to his true character and the critical state of the Colony? Before the time the new General Assembly may be expected to meet in July, 1876--if the present rate of expenditure continues--the whole of the four millions sterling will be spent. "What must be done?" will then be asked; "Borrow more," the reckless will reply. Better not try it so soon. Our credit in London is very weak, and the Money Market there is glutted with our Bonds. To borrow again we must pay dearer still. The Rothschilds have had enough of N.Z. loans, and the brokers who used to act for and in concert with the Agents of the Crown Colonies are, it appears, offended.

This is not encouraging: but if we will only manfully look the financial difficulties a-head--in the face--we may surmount them, but not without passing through critical times, and a period of probation which shall teach us to live without excessive borrowing.

Retrenchment, economy and prudence are now required to place New Zealand's political and financial affairs on a sound footing: but these measures may have also to be supplemented by the abolition of our expensive Provincial Governments, and the imposition of an income, a property or a land tax. Which of the two--out of these four suggestions--the settlers in New Zealand like best, I fear they will have no other alternative but to accept, within the next two years.

There is, I believe, the nest-egg of £800,000 of the million

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of guaranteed debentures, still intact. This may yet prove of invaluable service to the Colony--if not at once squandered in unremunerative works. There is also £500,000 in debentures yet unsold.

While I deprecate further borrowing, I admit that it would be unwise to stop, all at once, the progress of important public works now going on, and unfair to the immigrants whom we have introduced to complete them--at the same time I aver, that the borrowing power of the Colony has been so weakened by the last great loan operation performed by Sir Julius, that it will be extremely difficult to float a loan of even half the amount of our last one. Worse than this may happen, if a pledge--even a verbal one--has been given to Messrs. Rothschild that New Zealand will not resort to the London Money Market, for another loan, during the next two years. I have good reasons to believe that some such assurance has been given.

I presume the first business of the New House, which will meet in the year 1876, will be to appoint a Committee to enquire into the state of the Colony. Many concealments will then be unearthed, and the public will be startled with revealments which will, perhaps, restore them to their sober senses.

If the Members in the New Parliament truly represent the interests of the people of New Zealand they will declare their policy to be Economy and Retrenchment, and carry it out without fear or favour. Even if they do this, and find the Colony still cannot go on without resorting to raising more money by loans, they will act wisely and prudently by setting a limit to borrowing, and publicly announce that at the end of 1876 they will require a loan of only £1,000,000, and at the end of 1877 another of a similar amount. This, I submit, might enable the Colony to pull through its pressing financial requirements and embarrassments; and would also tend to increase the confidence of London capitalists in the financial

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strength and resources of the Colony. To borrow to this extent--and including the realization of the £800,000 guaranteed bonds and the £500,000 worth of unguaranteed debentures--will bring the Public Debts of New Zealand up to the enormous sum of twenty millions sterling in 1878, involving an annual charge, for interest and sinking funds, of nearly eleven hundred and fifty thousand pounds sterling.

This is much in excess of my suggested results at the end of the first portion of this pamphlet, and goes to prove, clearly, that I have underrated rather than over-estimated the great financial difficulties we have yet to contend with in connection with the Public Works and Immigration schemes. It would be a great financial relief to the Colony if the latter were entirely suspended.

Since the above remarks were written, our Parliamentary session of 1875 has been held. It will be recorded in the Constitutional History of New Zealand as a memorable one. In the absenceof Sir Julius Vogel, Major Atkinson was Treasurer, and delivered the usual financial statement. Soon the members of the General Assembly discovered the Financial situation to be most unpleasant to contemplate. For the service of the financial year 1875-6 a great deficit stared the Government in the face. What was to be done was soon decided; and abolish the Provinces and seize their Land Funds, became the motto of the majority in the House of Representatives. One man's pockets contained money; another man's pockets were empty. This inequality had to be adjusted; so a legal transfer of the former to the latter was speedily effected, and thus was equal justice meted out--for the man that was rich became poor, and the man that was poor became rich. This accomplished, a large surplus of income over expenditure was trumpeted forth to the world as a great fact and a consummate act of statesmanship.

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Thus were Provincial Institutions hurriedly and indecorously consigned to their grave after a chequered, but, on the whole, beneficial existence of twenty-two years. The Bill for their abolition was, on its second reading, carried by a majority of 52 to 17.

I do not see what else could have been done to increase the revenue--except the imposition of a Land, an Income, or perhaps a Sheep tax. But, after this act of Legislation, don't talk about the Public Works and Immigration Scheme being a success, when it is plain to the commonest understanding that, when the time has arrived for it to increase our resources, it is diminishing them; vide the absorption of the Land fund from imperious necessity; but also under specious pretences which will not bear scrutiny.

Nearly a quarter of a million sterling, obtained from the Land fund for the payment of interest on loans, must now be remitted to England instead of being expended in the Provinces on Public Works. The Land Fund has advanced far in the process of exhaustion. The best of the Crown Lands are sold, alienated for ever. The remainder is a diminishing quantity. So will the revenue from it. In some of the Provinces the annual income from this source is insignificant, and likely to be nearly all absorbed in local charges, such as the cost of surveys and management, &c.; still it will serve a present purpose--it will bolster up a demoralizing and corrupting system of Public Works and prevent the Jewlian Bubble from bursting, till the Colony suffers from blighted credit and the severe pressure of a Foreign debt of £20,000,000.

In conclusion, if Sir Julius Vogel, when he returns to the Colony, would but collect together all his adventurous and needy political associates, I am sure the public of New Zealand would not object to he and they taking their departure to some other green country: even though they took with them their carpet bags loaded with contents much more valuable than those which they brought with them.

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