587
of house property in the Colony.
It will be contended on behalf of house owners, that in certain cases compensation should be paid for such losses.
If such contention is upheld the Colony will either have to drop certain important clauses of the measure or pay compensation. And the only way in which it can do the latter is by raising taxation.
Therefore it would be unwise, we think, to trench upon the sources of taxation more than can possibly be avoided at the present juncture.
Moreover even if it is held that no compensation is payable there remains the question of undertaking some scheme of large Sanitary Improvement by resumption of Insanitary Properties &c., which both Mr. Chadwick and Professor Simpson have advocated.
To undertake such on any considerable scale would involve an increase of taxation, or, if the improvements were of a remunerative nature, the raising of a New Loan.
Furthermore since the Chinese are the principal property owners in the Colony it is they who will principally suffer by the drastic provisions of the Bill referred to.
And since the Chinese are the principal taxpayers also, it is they who will pay the largest share of any increase of taxation.
We are therefore strongly of opinion that instead of increasing the taxation beyond the $201,250 mentioned a loan should now be raised.
From the enclosed statement prepared by the Director of Public Works it will be seen that projected Waterworks alone are estimated to cost about $2,200,000 during the next five years.
Other necessary works will certainly cost $300,000 more per annum and as large returns from Land Sales are problematical it appears to us to be now necessary to consider the question of raising a fresh loan of about $2,000,000.
The Colonial Secretary is in favour of raising this amount in the Colony where the money might be obtained at the rate of 4% which with a Sinking Fund of 1% per annum would mean an annual charge of 5%. He contends that a country should borrow in the currency in which it has to pay its debt, and points to the example of the Indian Government who by borrowing in gold have involved themselves in serious difficulties, and of China who by agreeing to pay her indemnity at a fixed rate of exchange which makes it a gold payment.