The Conservative *
. AUSTRALIAN FAILURES.
PART I.
The accounts givou by Sir Charles
Dilke , Mr. H. De R. Walker , Mr. H. D.
Lloyd , and a host of minor writers , of
the working of the Australasian experi
ments in state railways , irrigation works ,
banks , loans to farmers , and state life
insurance , liave had various serious
defects. They have failed to make
proper allowance for the fact that dur
ing the greater part of the period of the
state's branching out into industrial and
commercial enterprises , wages and
profits in Australasia depended not upon
the resources of soil and climate , nor
upon the efficiency with which the
public enterprises were conducted , but
upon the rate at which money borrowed
upon public and private account flowed
in from Great Britain. They have failed
also to note the significance of the con
centration of the people in the capital
cities , the problem of the unemployed
in the capital cities , and the practical
failure of the railways to aid in putting
the surplus city population on the land.
They have failed to see that the experi
ment of state railways would have
broken down long since if the cessation
of the prosperity produced by the inflow
of'foreign capital had not been followed
by the practical cessation of immigra
tion , and a rapid falling off in the mar
riage rate and birth rate.
In the case of New Zealand they have
failed entirely to note that the recovery
made in the last few years has been due
altogether to private enterprise ; the de
velopment of the export trade in foreign
mutton , and the admirable transporta
tion facilities afforded by the large fleet
of coast vessels. They have overlooked
the significance of the fact that the state
railways , built at a cost of 16,400,000 ,
in 1898 carried only 2,518,000 tons ,
whereas the vessels that cleared coast
wise and entered coastwise had a tonnage
capacity of 5,900,000 tons.
Costliness of Experiment.
Finally , the writers in question have
failed entirely to draw attention to the
costliness of the Australasian experi
ments in public trading. Of late years
the people of Victoria , 1,200,000 in num
ber , have had to raise each year by taxes
between 700,000 and 800,000 for the
purpose of paying interest on bonds
issued for railways and other ventures
that do not pay for themselves ; the
people of New South Wales have had to
raise about 500,000 a year for similar
purposes ; and in South Australia the
annual burden of interest not earned
amounts to 1 per man , woman and
child. In New Zealand , with a popu
lation of 780,000 people , the deficit in
the railway department for the last ton
years lias averaged 212,000 a year.
Obviously , the taxpayer must bear the
cost of state investments which fail
either in part or wholly to pay for them-
selves. Money must be raised to pay
off the principal which represents un
profitable ventures ; the alternative is
the perpetual payment of the interest ,
which has not been earned. In this re
spect public industrial ventures differ
from private ones. For the. losses con
sequent upon misdirected investments
made by private individuals or stock
companies are borne in part by the
lender. For example , in 1890 the
indebtedness of the Australasian colonies
to Great Britain on account of borrow
ings by private individuals and joint
stock companies amounted to 115,000-
000 ; by 1897 that indebtedness had been
reduced to 85,000,000. A comparatively
small part of the shrinkage was due to
the withdrawal of British capital , but
by far the greater part must be at
tributed to the fact that large sums had
been written off as irrecoverable. More
than that , the British investor had lent
his money with the expectation of an
average interest return of five or six per
cent. Yet , in 1897 , he was receiving on
an average only 8 % per cent upon that
part of his capital which had not been
wiped out.
Australasia as a community of busi
ness men had been relieved of some
80,000,000 indebtedness , and upon the
rest of what it had borrowed it was pay
ing such interest as it could. On the
other hand , Australasia as a group of
states , in 1890 , had borrowed some
215,000,000 , and had agreed to pay
therefor on an average of 4.08 per cent
interest. A considerable part of the
money hod been misspent , and in 1898
was yielding little or no return. ' But in
this case the entire loss had to be borne
by the taxpayer. The British investor
in Australasian state funds continued to
receive the stipulated interest on the
full sum advanced.
Recent Industrial History.
The following account of the resources
of Australasia , and of the recent indus
trial and commercial history of that
country , will enable the reader to judge
for himself whether the conditions war
rant the rose-colored and superficial
accounts of matters Australasian which
have been put before him in the past.
Australasia is eminently a pastoral
country ; primarily because about one-
'half of the habitable area is unfit for
agriculture ; secondarily , because it lacks
a population willing to go upon the land.
In the year 1896-97 the value of the pro
duce of the pastoral industries was thirty
per cent of the value of the product of
all industries , oven though three suc
cessive years of drought had reduced
the number of sheep from 125,000,000
in 1891 to 104,000,000 in 1897. In the
same year agriculture yielded twenty
per cent of the total production ; while
dairy farming and the mining industries
yielded respectively ten per cent and
twelve. The remaining industries ,
TT
which yielded one-quarter of the total
product of Australasia , were subsidiary
to the industries already enumerated.
They supplied the people with the com
modities which all countries must supply
locally ; and represented in addition ,
some manufacturing , such as the appli
cation of protective duties will bring
forth oven in sparsely settled countries.
Of the mining of iron ore there was
none. Nor , by conseqxience , was there
any of that kind of manufacturing
which depends on the production of pig
iron and steel.
Wheat covers more than half the area
in cultivation , and yields on an average
about ten bushels an acre. In the
United States and the Argentine Re
public , on the other hand , the average
yield is respectively twelve bushels and
thirteen. The former of these countries ,
also , is less subject to drought than is
Australasia. Wheat raised in the United
States , if exported , must be hauled by
rail some ten to fifteen hundred miles.
In Australia , on the other hand , the
maximum haul is little over two hundred
miles while in the Argentine it is still
less. The advantage of Aiastralia over
the United States in the matter of
length of haul by rail thus far , however ,
has been neutralized by the excessively
high charges upon the Australian rail
ways. To ship wheat a distance of
two hundred miles over the railways of
Victoria , or a distance of three hundred
miles over those of New South Wales ,
in 1899 , for example , cost as much as to
ship wheat from Chicago to Liverpool.
Finally , the Australian farmer thus far
has been handicapped by a comparative
scarcity of farm labor , arising out of a
restricted immigration coupled with a
government policy of making work for
unskilled labor on public works at eight
hours a day and a minimum wage
dictated by trade unions. Public opinion
is so strongly in favor of the continua
tion of this condition of things that the
comparative dearth of farm labor must
be deemed a permanent factor , almost
as much so , as is the relative inferiority
of the soil. So far then as competition
in the world's wheat market is concern
ed , Australia enjoys no particular
advantage , and may be said , even , to be
at some disadvantage. On the other
hand'it has at last come to be admitted ,
even in Australia , that the only means
of correcting the present abnormal dis
tribution of the population between the
capital cities and the country lies in the
extension of agricultural operations.
The pastoral and mining industries
have not sufficient margin for expansion
to be'able to aid materially in the prob
lem of putting the people on the land.
Manufacture for export is out of the
question in a thinly populated country
with only meagre deposits of coal and
no deposits of iron. There remains
then , only the tilling of the soil for
export. Some progress has been made