Julius Vogel The Vogel Plan

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					                         Julius Vogel & The Vogel Plan

Julius Vogel is best remembered for is his "Great Public Works" scheme of
the 1870s. Before 1870, New Zealand was a country largely dominated
by provincial interests. After Vogel proposed borrowing the massive sum
of £10 million, New Zealand developed significant infrastructure of
roads, railways and communication, all administered by central
government. This ultimately led to the end of Provincial Government in
1876.

Treasurer of New Zealand, Julius Vogel, brought his great Public Works scheme
before the New Zealand Parliament on 28th June 1870. Although the scheme was
not original (a similar one having been suggested eight years earlier when the
Maori Wars had rendered it impossible to spend money on immigration and Public
Works) the magnitude of Vogel's plan made the country gasp.

His Government, behind which Vogel was the moving power, had to grapple with a
difficult task. The Maori Wars had raised the burden of national debt to £8,828,000.
The population was less than 250,000, and yet was scattered over nine provinces,
each with its own Provincial Government. There were only forty-six miles of railway.

Vogel's plan had a number of elements: The colony was to incur a liability (A
liability is money you owe. An asset is something you own.), spread over a number
of years, amounting to about £ten million, which was to be expended in set
proportions on immigration, railways through each island, roads through the
interior of the North Island, the purchase of native land in the North Island, the
supplying of water on the goldfields and the extension of telegraph works.

These works were too vast to be undertaken by small local governments and were
to be carried out under centralised national control. The necessity for taking the
administration of public works and immigration out of the hands of the Provincial
authorities was pointed out by Vogel when he wrote: “Immigration and public
works, from 1853, when the present Constitution was first established, to nearly the
end of 1870, exclusively devolved on the several Provinces; and it may be said that
except to a limited extent in the provinces of Otago and Canterbury, they had from
various causes ceased to exist for a number of years previous to the latter date.
Even if the provinces had generally been able to administer these two great
departments of colonisation, it became evident that an administration conducted
by independent local authorities with distinct local interests and functions, would
necessarily be disjointed and wanting in system and comprehensiveness.”

Vogel, in presenting his scheme to the House, stated that there was a desire
throughout the whole country for such a scheme. “I contend that during the next
ten years the colony will run no risk if it commits itself to an expenditure of ten
million for railways and other purposes comprised in these proposals. The land
should be made to bear a considerable portion of the burden. We propose that
authority should be given to contract for the railways by borrowing money, by
guaranteeing a minimum rate of profit or interest, by payments in land, by
subsidies, or by a union of any two or more of these plans. I suppose that some 1,500
or 1,600 miles of railway will require to be constructed, and that this can be
affected at a cost of £7,500,000 together with two and a half million acres of land,
and that, in addition, about a million will be required to carry out the other
proposals I am making. I leave on one side the cost of immigration, because that
expenditure will be essentially and immediately reproductive. The question of
immigration is essentially one of the greatest questions of the day. From whatever
point of view you regard it, immigration is a profit to the state, if the immigrants
can settle down and support themselves. As every immigrant who becomes a settler
will be a profit, so every immigrant who is unable to procure a livelihood will be a
loss. We therefore say that we will introduce immigrants only to those parts of the
colony which are prepared to receive them. What the nature of the preparation
may be it would be impossible now to define. It might be land for settlement, it
might be employment of an ordinary nature or on public works.”

The foregoing remarks show the various points which Vogel had in mind in
developing his scheme. In view of them it can hardly be maintained that the
scheme was not carefully safeguarded in most respects. The scheme was to work in
a cycle. Immigrants were to provide the labour for the works and so obtain
employment as soon as they reached the colony. As waste lands were thus rendered
accessible by their labours, they could take up sections and become producers.

It was provided that large tracts of land either already owned by the State, or to be
purchased by it, along the routes of the railways, were to be reserved as a public
estate. The possession of such land would facilitate settlement, while it would also
form a security for the expenditure. It was calculated that on subsequent lease or
sale, the increased value of the land resulting from railway building would recoup
the colony for a large part, and possibly for the whole of the expenditure. Thus
Vogel stipulated for sound security for the loans which he proposed to raise.

The magnitude of the 1870 scheme is effectively highlighted by an American writer:
“The total value of the appropriations of land and money amounted to
US$60,000,000 or US$70,000,000, which for a community of 250,000 was a bold
bid for development; equivalent, in fact, to an appropriation of
US$18,000,000,000 or US$20,000,000,000 for public improvements in the United
States to-day (1904), or enough to buy up all the railroads and telegraphs in the
country, clear out the slums of our great cities, irrigate the thousands of acres of arid
lands and colonise the needy in co-operative settlements.” The writer goes on to
state that as a result of including the reservation of lands along the railroads as a
public estate for future sale or lease, the Public Works policy prepared by Vogel was
one of the “wisest, justest, most far-sighted plans that has ever been devised for the
development of a new country.”