The Dominion. THURSDAY, JANUARY 28, 1909. THE NATIONAL CREDIT.

Dominion, Volume 2, Issue 417, 28 January 1909, Page 4

The Dominion. THURSDAY, JANUARY 28, 1909. THE NATIONAL CREDIT.

/ s Speaking at Hastings yesterday, 'the Prime Minister issued onb.moro of his never-ending statements respecting the financial and economic soundness of New Zealand. It ia significant, ioweVer, that Sir Joseph, who has hitherto set no limits to the extreme optimism of his sweeping eulogies upon the country's financial and economic condition, can find nothing more inspiring to say than that the forthcoming .returns will show that New Zealand is the only one of all tho countries of the world to show a v rising revenue. Of the rate of expenditure he apparently dares not say a word. Jt would be amazing, if a country still almost virgin when compared with older lands, and fed with a larger loan diet than almost any • other country, were not to[ show an increase in revenue. Growth is natural to youth. We do not 'cry out wtth delight and admiral tion as at a splendid phenomenon when we find a child's inches increasing while his elders are either stationary, or shrinking in old age. Of course our revenue is increasing. It should be increasing by leaps and bounds. We should think it monstrous.if it did not. But merely to I look at revenue is to see only half tho situation. In-a young country a very small increase in public expenditure should suffice to produce a large increaso in revenue, or in development and sturdiness, just as in the case of a growing child a slightly enlarged diet should produce a growth altogether disproportionate to the growth that such an enlargement of diet would produce in a grown man. And we very much fear that tho increase in rovonuo referred to by @ir Joseph Ward has been accomplished at the cost of a staggering increase in expenditure.

We shall know in a few days just how the expenditure has grown, and we may leave this point for the prcsonfc. But the oddity of Sir Joseph's statement will confirm the suspicion, which must bo general by now, that all is not well with the country's finances. The public is beginning to realiso that the situation is not so pleasant as our optimistic Prii&e Minister has striven to paint'it in his speeches during the last two years. As a correspondent points out in a letter which we print in another column, the credit of New Zealand abroad is already reflecting tho in-

jurious operation of "Liberalism's" financial mothods. Our correspondent points out that in 1895, Sir Joseph Ward floated a 3 per cent, loan at £94 Bs.'9d. without troubling the underwriters; and added to his homily'at the time on the benefits of cheap money a suggestion that the way was open to the "extinguishment of pur public debt." In 1899, a million 3 per cent, loan was floated at £96 To-day, what is the position 1 Seven-year bonds it 4 per cent, bring only or 101. The figures given by our correspondent may be supplemented by somo details which further exemplify the general'lowering of bur-credit. '. The, lowest quotation for : Now.Zealand four per cent's, between 1898 and 1906-was 104 5-8 in the latter year.' The lowest figure in I9'ol was 110|. In 1907 the' lowest figure was 103£. Now it is 100$,. or less< We may quote in this connection the following paragraph from the Sydney Morning Herald of January, 20: "Some few. weeks back the State Treasurer, finding himself pushed for a little ready money, raised, three-quarters of a million' sterlirfg of Treasury bills in London at a.somewhat onerous rate. He was getting a certain.amount of money regu-' lafly over the counter at 3i per cenCat par, and' had he raised the rate there is no doubt 1 that he could have got more. Rather than disturb .the -•' local., market, howevor,-he Went to London for the neces- . s'ary accommodation, where, indeed, the money ,was actually wanted. The: Now Zealand ■■ Government has not been so scrupulous.,- It has' just placed'-. £250,000 4 per cent, stock in and Melbourne at a price that has riot been'disclosed, but it. is materially above the rate that the New South Wales Government has been 'paying. A little' more of this kind ;of thing arid we'shall find rates'advance all round, which would be of dubious advantage to'the couritry'ai large."; '■"

"A"price that is not ''disclosed" leaves room for a good deal.of speculation, -fho concealment necessarily.-means' that'' ; the, lende'rs'.had the :best of the, deal.:; Were it otherwise,'. Sir .Joseph, 1 would .'hardly have: omitted to proclaim: the fact from the/ 'housetops.,; Evidently r ' the" Prime Ministbr tvas unable. to. get _all he wanted in Sydney arid Melboiirne, and'was thus 'ibrced to, iurn ,*to london .for £6C(0,Opo:. Disturbing the: Australian money market rnaynqt seem so heinous as disturbing the New,, Zoaiand money market, but we may be sure that a. ; financial disturbance in Aiisfcrrlia will react on, New. Zealand. As Sir' Joseph, Ward: himself'remarked,'at: Winton ,'in October last is a very, difficult thing to; handle and: very sensitive.:,, The -momerit one ■ touched it,and l 'started putting' rates: "up,'. one produced 'widespread/effects,'that, like ,the : boomerang, came back sometimes and -hit; thoV -\ who'' caused:Ltheiri.-/; vThe. natural situation of ; New Zealand, as we have;never failed to insist; is'Buch'that tho-.xountfy, should ...grow./.rapidly,., in, strength aridwealth,;and in'the esteem'of the', putside .world;. ' Bad ; laws and >bad administration, 1 , however, .can' injure it very.'''-; Seriously, \.; even though 'they may ' .still..leave'; it X'unshaken ..- in /.the confidence of its patriotic sonS; : Bad;la>ys and-bad administration have alreadyhad their;offects;' they: : 'have 'operated, .long enough to:warrant tho-public'in seeing ;that they cqmo speedily,to:.ah'end. ■ ■':.•