DEMOCRACY AND COLONIAL FINANCE. T HERE are few things more misleading
to a traveller than his first impressions of the prosperity and con- dition of a Colony. Familiar with Old World States and cities, he is surprised, even overawed, by the amazing rapidity with which stately towns and vigorous com- munities leap straight into existence. On the shores of the exquisite harbours of Sydney, or Auckland, or Welling- ton, he finds an almost comical reproduction of European life ; for costly harbours and wharves, public buildings of a grandiose sort, innumerable race-courses, railways, and the electric light, are features of all self-respecting Colonial cities. Thousands of miles away from Australasia, across the illimitable Pacific, in the twin infant-States of Oregon and Washington, such striking towns as Portland, Tacoma, or Seattle, inspire an equal amazement. Here, in a region of half-explored mountains and forest-strewn coasts, and amid an almost unpeopled land, vast hotels, im- mense and ever-expanding railway systems, and luxurious steamers put to shame the boasted resources of our venerable communities. Such is the energy and wealth of the adventurers, so restless and unceasing the toil, that the marvellous flower-trick of the Asiatic juggler seems to be parodied on a gigantic scale, and cities, railways, com- merce, to burst into maturity with all the swiftness of the juggler's rose. Everywhere the common talk is of vast fortunes lost and won ; of mountains of solid gold and silver ; of patriarchal millionaires whose estates are princi- palities, and their flocks and herds legion ; of a general prosperity which is shared by all. Amid such surroundings, the imagination is led captive, and the European, familiar only with countries where centuries of accumulation have been the condition precedent of expenditure, fails to dis- cern that these splendid enterprises are a mortgage, and often a reckless mortgage, on the future. In America cer- tainly, in Australasia probably, the possibilities are rich ; yet in the future, a dozen at present unfelt obstacles may eventually frustrate or tarnish the brilliant speculations of to-day. The permanent influence of extreme climates on the Anglo-Saxon race, labour questions, the real extent of mineral and agricultural resources, the existence of convenient and adequate markets,—these are some of the factors in the problem whose value can only be tested by time and experience. Meantime, the transient spectator hears only of unparalleled resources, of the freedom and exuberant life of young democracies ; and in the general intoxication he confuses political with economic conditions of prosperity, overlooks the inversion of the old order of economy, and forgets that money is being spent all around which has never been earned, and that indebted- ness is growing up to an alarming degree. He sees no pauperism, and straightway assumes that a democratic order eliminates the chance of poverty. He hears of the gold and silver treasures of Mount Morgan and Broken Hill, and he believes the natural resources are illimitable ; while the daily boasting he encounters of freedom and equality leads him to think himself landed in some sheltered haven of political virtue and economy.
These charming dreams are, however, too apt to be dispelled by a larger observation, and by contact and con- versation with the most thoughtful and candid of the inhabitants. Complaints of jobbery, wastefulness, incom- petence, and corruption, are too frequent to be ignored, and after a period. of hesitation, the confession has to be made that democracies are but one-sided affairs after all, and no great advance towards political perfection. There are perhaps no more typical instances of this truth, than the Colonies of Victoria and New Zealand.
Both have been richly endowed by Nature, and if Victoria can boast the great city of Melbourne, and rich resources both pastoral and mineral, the two islands of New Zealand enjoy an admirable climate, scenery of the most surpassing charm and variety, a sufficient store of gold and coal, and an agricultural prosperity of a very high order. The in- habitants of either Colony share with a great many other communities the belief that their own is " the freest country on earth." All the best recognised Radical panaceas are respected and enforced ; every citizen has a vote ; political life is so open to all comers that the more self-respecting are apt to hold aloof from it ; the system of primary education is excellent ; and no ecclesiastical Estab- lishment shocks the feelings of the Protestant Noncon- formist, or afflicts the purse of the thrifty Agnostic. Yet in these rival paradises of the working man, the trail of the serpent is, alas ! perceptible : and it happens in this wise. Political theorists are apt to overlook the fact that the cruder a society, the more eager it is to imitate, and the less capable it is of self-restraint. Now, universal suffrage in Victoria and New Zealand throws the final poli- tical authority among a large and shifting mass of ignorant beings, who are constantly being recruited by fresh-corners from England and elsewhere. These arbiters of new destinies bring with them, together with an innocence of previous political responsibility, a good many unsound and undesirable ideas. They are accustomed to the habits and facilities of old and wealthy States, and they desire them in their new homes. Old settlers who have borne the heat of the day, are more patient and wiser, and prefer steady progress. The proletariat at large, however, is impatient ; they see fortunes the owners of which were, within a short memory, no richer than the poorest ; the old gold-digging fever has left its legacy behind in the shape of a universal weakness for gambling ; but above all, the new-corners have been attracted to the Antipodes by the hope of high wages, and high wages they mean to have. Apparent social equality, free education, paid Members of Parliament, are all good in their way, but exorbitant wages.
are best of all, and the man who secures them for the people, secures for his party a majority at the polls, A spirited policy, ambitious railway or harbour schemes, constant loans the bulk of which will go in wages,—there are the aims of the enlightened voter ; and as he holds the scales, he usually gets what he wants. Practically, there are no political questions of momentous importance to be discussed in Colonial Assemblies, and the rise and fall of Ministries may be summed up in one word, " Loans."
With a population scarcely larger than that of Devon- shire, the policy of loans has provided New Zealand with a public debt of some £38,000,000—apart from provincial borrowings—some useful and some quite useless railways, an exaggerated. supply of harbours, two of which, New Plymouth and Gisborne, are notoriously of ill-fame, and other conveniences of a costly sort. Victoria, on the other hand, with a white population under 1,200,000 in number, has lately touched an indebtedness of £40,000,000, and by way of burning the candle at both ends, indulges in a severe Protective system. Melbourne absorbs more than one-third of the population of the State, and to bolster up its manufactures and bloated growth, the corn-owners and farmers of Victoria are made to suffer. For Protection means high wages for the urban folk, and their numerical superiority allows the people of Melbourne to lead captive their more luckless brethren up-country.
In the present all goes well. The Victorian credit ie good enough to get what it needs from the London market, and a lavish outlay of public money both satisfies the greedy maw of the Victorian working man and attracts immigrants from other less favoured Colonies where loan- money is less plentiful. It is a curious piece of irony that the very class which has helped on the financial mis- fortunes of New Zealand is now steadily abandoning her for Victoria, leaving the burden of public debt, piled up largely for its own profit, to be suffered by the luckless owners of property. The readiness of a democratic body to incur heavy responsibilities, coupled with its eagerness to shift them to other shoulders from the moment that the burden grows irksome, is one of the most real dangers of modern times, and one which is fully and unmistakably to be observed at work on the other side of the globe. There, class selfishness and improvidence may be seen to be, not the peculiar characteristic of aristocratic and semi-feudal societies, but a vice written large on the most popular forms of polity. Province strives with province, and town with town, for a share of the spoils of the State. If the North Island of New Zealand needs a railway for its inner communications, the South Island must be soothed with expenditure on some cherished scheme ; this district or that must be encouraged by an advance, or else some land " boom " or other device is to be engineered by a judicious outlay. While in the United States of America the greater wealth, the longer period of settlement, and the possession of vast resources still untouched, throw speculation into private hands, the scantier populations and political circumstances of Australia and New Zealand thrust the State into the unfortunate position above described. Democracies so crude, so ill-leavened with experience and principle, so void of checks to selfishness and wayward impulse, as those of Australasia, fail in some of the highest qualities which engender commercial and financial prosperity. Yet it is only fair to point out how largely the evil has been furthered by the reckless facility with which the capital of London has been placed, and will again be placed, at the beck and call of Colonies imperfectly able to bear their existing load of debt. Before the English market was closed to them, the freedom with which the New Zealand banks squandered the millions of capital obtained by them seems incredible and demoralising. To use the words of eye-witnesses, milpey was literally forced on the customers ; there were families who lived in affluence on no capital except what the banks advanced, and large estates and establishments were fotmed by persons who were practically insolvent, or had never possessed any fortunes. To-day, rigid economy is painfully teaching the New Zealanders, as some day it will be the lesson of the Victorians, that to pledge the future to the hilt is a temporary and evanescent joy. Expenditure on public works is attractive, and may be remunerative ; but the success of the venture depends on the prudence and the economy with which the outlay is made. And the gist of the whole matter, as regards the democracy of New Zealand in the recent past, and of Victoria in the immediate present, is, that its expenditure has not been marked either by prudence or economy. The experiences of the one to-day will be that of the other to-morrow. The halcyon days of borrowing are short ; then comes the stoppage of public works, the shrinking of private expenditure ; taxation presses with crushing weight on all forms of property ; no new capital comes into the country ; the number of persons on whom the burden of the debt falls grows smaller and smaller, and disaster overhangs all. Meantime, the light-hearted son of toil flits to happier lands, ready by his vote and influence to lay waste fresh pastures. Such is the story of New Zealand ; such threatens to be the destiny of Victoria.
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