TREASURY BILLS.

Dominion, Volume 2, Issue 511, 19 May 1909, Page 8

TREASURY BILLS.

; BY ; THB PREUtEn, ///Sir. Joseph WiW night/ on tho Bubject of Treosuiy ■ Billa, in reply ; ,tdi an editorial in yesterday's DoimnoN. ''..<:./V'Tho':.a('tiofe'-:in'-Tin).'D6iaNiow''tliis',inoiii-.ing oh:thV,subject <& Treasury Bills is baaed •on a/wrong assumption," said the Prime ; ,Ministor, : ; .;.' ; The paying, off of the £450,000 ..'•which'■;;! mentioned at.lnvercargill is in an ''entirely 'differentsposition ■ to, the payment /ojt'/0f... Treasury. Bills issued in,'.- anticipation ; r./revenue.: It will be readOy seen on reference to the reoords of Parliament.that when theßallanco Government came into office in ;: 1891, there .wore then, outstanding £719,000 of Deficiency Bills, which, had been issued ■' by the previous ' some years before, not m./anticipation of revenue, but to meet /tire/requirements .of, the...'then! financial position of the country... In that year,.authority was given by/Parliament i to increase the amount of Treasury Bills that could be auHiorised up to £900,000. . This left the /amount-available:for the Treasurer of the day to issue in anticipation of revenue only tlloljOOO;. which is/the■ difference between £719,000 and.£900,000.:. This was found to be. too small ; ah amount, and in 1893 Parliament 'gavo, authority by_ statute.to inorease the amount/up to one million, ;with a further amount of £476,000 for theVspecial purpose' of redeeming £47,6,000,0f Imperial debentures. An amount of £19,000 out-of /the £719,000 was paid off,, and/that'''left £700,000,.; which. was not, as suggested: by Thb : DoMDaoK, in.the position of beingraised as Treasury. Bills, which are issued from timo : to time in anticipation of 'revenue, /On the i contrary this £700,000 was a floating: debt, and, has been so-recognised by everyone who ; ,of the country.'for ''upwards" of twenty years. "' "Three years ago I provided lor £150,000 fox the purpose of reducing this debt, and in the following year.,! : provided -A or a "further £150,000, andih. the year just ended another, £150,000,/making^£4so,ooo in all So thereis nothing illusory: or" imagrnaiy'alM>ut/this. umncial .operation.' Itj is, not only a demon-' •rtrated fact, but to/show the reality of tie 'Sebt, we have; for .upwards; of twenty years been' paying >interest' on the/ £700,00b re-, ferredto, and by paying off £450,000.we save, interest on that amount at' 4 per oent./per/ nimum. When the £700,000 remained as part of the floating: debt, /the Treasurer ./was ob-, viously: only /able to; issue the /balance of Treasury Bills over. and above this amount; up to the limit fixed,'./should tJbey be : re- - quired for the purpose of; anticipating/ revenue.. Nothing that' anyone can say can in any way/minimise the. advantages to New' Zealand of Spaying off £450,000 of what has been for nearly/a quarter of a century a, fixed amount of,debt. ,/ : ■ :'•'//'// ."The law has wisely provided that there, shall bo' available: a ftmount of •Ireasnry:Bills to;issue from time to time in anUcipuUanof revenue, and there is '-nothing •' injurious in any way whatever to the financial,/ position/in/ issuing /such- portions of the, oaix)unt M. may from timo to time be reanired,; and it is. not/a factor .that can J be regarded '. as in"; any way unsatisfactory./ It, means simply that When/the revenue has notcome /, in at, a particular ■ period, as,, for hi-' etanoiai,/:when.heavy/.remittances have tb'be', paid on / our, loans, that Treasury 1 Bills; can I be,/ and should: bo,-/ issued as 'a .temporary : Bwairity /to.-,/obtain ._ the \money '■• before.' the ; actual revenue-is paid into the Treasury. .." There'/was/nothing/whatever /thai was- : nnsieading -in the': stotemeht ./which.'l/made' .atlnvercargilL//I Stated simpk,|the'actual : fact,.and 'correctly desorihed v?hat : I am sure; is recognised in the financial-world as/a wise; operation./ fortunate thing that the' 'Btate'ofour finances'is.such as to enable such/ a largeTeductionto be made in our indebted-' iness;"./':"//./ /:,'•//:;/,';,///:;/ -,',://' -:///.'/ 1 -:/': /: /

■■.'■;-; : .'lSir : .Treasury Bill/transactions, given above does not affect our contentions. He • claims credit for having;/ saved '••/,. the'/• country interest on £450,000 worth of, Treasury; BiDs. / We gave him credit f6r'tbjs,;.althbug]i.'he probably is not entitled to cjaim credit for thati amount. We said: V'Since'iirterest must be paj3/upon thorn; it is all to -the Prime Minister's credit that:he has paid off £450,000.'! Whore the Prime Minister is misleading, and this js whatwe oomplained/df, was in conveying theimpression, that this paying off of Treasury. Bills meant/something,fiial. o^/contention was that it was, a /caßh-box transactioh.; We pointed out/that; the might at '■". any: time issue/Treasury Bills for an increased amount; AKITHAD ACTUAIiT. IIONB SO.; who wul trouble to look up the public accounts as gazetted for the September quarter of 1908 ; will see that the/Treasury '.:Bills^' ; ';outsta^ng'r.L'at; i ,iibAt l '.'. l tiine;> totalled £600,000, .whereas at the beginning of that year they were only £4fJ0,000, showing that: the. Government 'had issued £200,000 worth; more of /Treasury-Bills than they started the yearwith.;V;N6.mentionis made of this by the Prime Minister,and so far. as hoiis concerned/the"public',would; gather from- his statements that the year had been commenced .with ;£4oo.ooo;worth, of" Treasury/Bills and that they had remained at that amount; until the Govennhent had /reduced them to the '£250,000 art which; they'.appeared in'tho final returns'/for,.the year.;,"The attrtudeV of the Prime is quite. misleading. He can at any/time.increase the amount of Treasury; Bills, and, as shown above, he did so for a period of last He can/do so to-morrow, and -for all/wo know/he may have done so sinca; the beginning of the'present year. We 'desire"to giro Sir: Joseph Ward every credit whore he/Reserves and in-'our, article of yesterday we conceded him more' probably than he was entitled to; but w-e must/express oui: disapproval of his absence of candour in placing' matters of public concern before the! public.' The publio: are entitled to /know tho whole, facts, not merely those; which it suits thopurposes of.the Goverhment to placei--le> fore:.them.] .■ '; , /; :.//,