Studies in New Zealand Investment 1871-1900
Creators: name: Dowie, John Alexander
Publisher: name: The Australian National University
Year: 1965
Subjects: New Zealand, capital formation, investment, railways

description: This thesis consists of three studies, each to some extent distinctive in character, but linked together by a common concern with investment in the late nineteenth-century New Zealand economy. Each study grew of its predecessors on a reasonably systematic way and the most practical introduction to the thesis is probably a brief outline of its evolution. This will also provide a précis of the contents. The initial general intention was a largely quantitative study of investment, based on original estimates of domestic capital formation, but extending, possibly, into the questions of source of funds and institutional channels of financing. The prime aim was to take one step towards providing New Zealand with the historical time series for major economic variables which are now available for most other developed countries. The compilation of such series is, however, a lengthy process (especially for the beginner) and it was obvious that, however much an historical series for capital formation in New Zealand was desirable, its construction would not, by itself, provide a viable thesis. Also not unexpectedly the demands of purely quantitative research gave in increasingly added attraction to some literary investigation of the period concerned; literary investigation which would in any case be essential if any flesh was to be put on the statistical bones. The first and third studies (parts A and C) are therefore envisaged as complementary excursions into the two broad fields of emphasis within economic history – the quantitative and the institutional. Part A comprises, after a brief initial survey of some of the main conceptual problems surrounding the compilation of historical capital formation estimates (chapter 1), a discussion of the sources and methods used in deriving the estimates of fixed capital formation in New Zealand, 1871-1900, then presented (chapter 2), and an examination of the major features of the resulting series (chapter 3). Part C consists of a basically literary study of the parliamentary debate which formed the background, at the immediate decision-making level, to the most important single component of aggregate capital formation – public railway investment. Chapter 5 defines the scope and depth of this inquiry and establishes some of the background, especially the important geographical setting. Chapter 6 and 7 describe the course of debate and railway construction policy in the successive time periods, 1870-7 and 1878-90. The institutional inquiry is thus confined to the first two of the three decades for which quantitative estimates were made, these covering what can be interpreted as a ‘full-cycle’ in railway investment – beginning with the launching of an ambitious programme of construction and ending with the virtually complete abandonment of activity. Chapter 8 contains an attempt to summarise the main features of the government railways operating performance, both a vital part of the size and nature of the undertaking. It has a time-framework which overlaps the preceding policy study in the eighties, but also embraces the nineties and in fact extends into the first decade of the twentieth century in an effort to incorporate the gestation period of railway investment made up till 1900. As suggested by its location, the second study (‘Inverse Relations of the Australian and New Zealand Economies, 1870-1900’) falls somewhere between or perhaps more correctly, alongside the other two. It is essentially quantitative, developing out of the juxtaposition of the capital formation series derived for New Zealand and those previously constructed fro Australia. However, it moves outward from investment considerations to look at a number of more general aspects of the behaviour of the two economies during the period, in an effort to press the inversity as far as possible (especially descriptively). Apart from the intrinsic interest of the topic it serves a useful purpose in the thesis in making clear that the New Zealand domestic investment took place in an international environment. Unfortunately this point can be made only in largely implicit fashion in the rest of the thesis.