The Dominion. SATURDAY, OCTOBER 2, 1909. INCREASED BORROWING FACILITIES.

Dominion, Volume 3, Issue 627, 2 October 1909, Page 4

The Dominion. SATURDAY, OCTOBER 2, 1909. INCREASED BORROWING FACILITIES.

I- ;.-. Until information to the contrary is ~ available,; the public must assume that the "pleasant' surprise " hinted at as one' of 1 . ihe ; purposes of .the Piume. Minister's visit'.to Great Britain is his announccjrient'that hchas made'arrangements that 1 will enlarge the borrowing facilities of ■ the,,ldeal 'bodies.' : It is rather a dreary thought...that -the.Prime Minister,is ( so little-iimpressed'.by: the plain lesson .that : i wo -havo rocently.had on tho'necessity,for. . findings new way of life as to 'remain , . wedded to his theory that there is nothing : left for ,this,country but to,,borrow .more : freely■ than. ever;:. His' acfiuaf. proposal, ot course, is on the surface something dif- ■ feront:from a proposal to assist the couri- , try:.to get jdceper.; , into '.debt. > He has 1 merely, arranged! , that; all the money rc- ,' quired by local bodies .will be obtainable .' in London, at .3$ pbr cenkj .and l>o .ssyp pxpressly.thathe"wants to make>ifc .clear ; that. public bodies will ;r(ot- be encouragod,!to;go in for-wholesale'borrowing;"' ; iThis, yhowover, yo 'fear is merely the for-' ■'_ mal ! ;;profession, .of., virtuous.'.intentions' .- which ip the invariable accompaniment of ; designs • that : aro ..not .quite so,", virtuous- ! It belongs, ; to; the , 8 : amo class 'of sentiments as";tho /timd-honoured 1 declaration of .the jßudgeteor ; ; that his: estimates- have been ' framed, with .."; a. due regard -for.! econ-; ptny,"',;Wo had better'say. at o'n'co that the ■ schemo. outlined- by. the. Prime Minister , is-i'in : itself a ,good■.. ono. \- Not only is it ■'. in.general'preferable that public loans, ■ in L a;cou'ntry''like; this, should floated ; abrbad-.as far '.as j possible; thoro,' is this particular fact in favourer that policy,. ; wborcas in;; the/, loans- ■ raised "in v New Zealand by;',. local amounted roughly to 38 por'oant. of the total .of these, bodies,, tho porcontago , had risen by March, 1 1908, to: ; over 67.,, The following table, , which does not: 1 include £1,691,083 borrowed through the general Government, shows tho course !' of,:the : indebtedness: ■■ ■: : '■■'■■: •:'■'• ■■'•.;■'■ :Afc;Maroh\-:.'Rais.ed in:N.Z.' Raised Abroad. :,: '.V r ; -v' ::■£ ■:]''>:■■ '■:£■■:":■ ' '.:•'•'l9o4' ■■..' 3,369,410 • 5,620,500 ' ■ ; ;:;;,.1905 ; ' : ■;■'■ 4,379,642 . -5,638,600 ' . : ,;,VIOO6. ; ■ ■■": 5,250,551 ." : '5,467,500 '' , ' 1907: ;... 6,W5,548 , 5,470.600 ; ;:;v/1908 ;■; V 7,246,834. ; [■' lUn'dpr'.'ttie \ncyr arrangement 'proposed,! tue money'will only be pbtainablo in'sum's; of £100,000 ■ and over, and .it: will, there-.' foro.bo'.-nocessary,; if the scheme .is to.'bo . -taken.'•'adyahtage.-of, that thoroi rnusfc'bo a good , .- deal of joint /borrowing. ■•'.ln; ; so far , 'as'this.'will' make: for the-cprisolida-; .;. tion .of.'the local,bodies' indebtedness,''.at' .wi.i:DC'a;;g6od,thing.' ■ -':;r, ';,:■; ■ , ■ Haying; recognised., -the-, merits ,of;-tho ; new scheme,:'it. becomes necessary to con--sider tho fact', that; it. is - the: Ward Admin^ ■; istration-which.has,tho-scheme in hand. ; .Any'serious .contemplation of-"that- fact must result ; in a very serious shrinking, of; the. attractiveness, of the ' proposal. Against ■ the ■ Pkime MiNisTsn's -formal warning that he will not favbuy " : sale borrowing !■—a warning that means . just exactly nothing at'allj-unless.he has . changed vastly.since .his visit Home— ' must; bo [sittho words uscd.by Mr. Millar at a local gathering towards tho end of- July.:■■.;■■.".Whpn Sir Joscpn, Ward re-. turned from England,",said Mr. Millar, :'■ hfi . would bring back, such, a,-message as would:make his old friends-.;spring- . round him again." : Mr. Millar, earlier in his speech, -had; said that'it:..was, the Government's sorrowful obligation to act . with statesmanlike virtue.that had driven thoso : old--friends. l , away. --'"UnfoTtuiir ately," he said,- "circumstances had lately; compelled'the Government to do things thatnuist make.them unpopular, but it was-their duty as trustees of. tho national estato to conserve, that' estate.. , ' Since it was prudence and.economy that drove the old friends ,away and chilled their, ardoiir, a scheme, that has no , virtue but soundness, and usefulness is not the schemo'to cause the gambollings so con- '■ fidently anticipated by Sir Joseph's colleague. • The public .read ■' Sir Joseph avightwhen; almost .before ho sailed for: London, •'the common talk on tho tram-. .cars and in the streots was of tlic.mil-lion's-that ho was to bring back. The local, bodies must of course- continued to borrow, , but their, share in increasing the public debt has been so large that: Vo 'view'with'-misgivings'--any-activity, on tho ' Prijie Minister's part.in the direction' ot' .making.'it. easier: for, them: to indulge in further borrowing. , ; Between 1699 And 1908V-thoir■'■.gross.'.indebtedness .increased from'.; £6,063,254 to '£12,532,334—an; ;incrcano'of SO por.cdnt.in-'ft decade during which tho population increased by only

2<> per cent. [We take'our figures from the_ advance sheets of the Year Book for 1000.] No such enlargement of tho facilities for borrowing as is proposed can be safely allowed unless some safeguard is provided against the operation of tho Government's method to make its friends " spring round it again." Tho great growth; of the local bodies' indebtedness should receive careful attention, The time is ripe for tho establishment of a general scheme.of consolidation, and thef introduction of some such commission as is to control the now.Development Fund to be established in Britain. • That is a reform,, however, which has small hope at present.. In the meantime the legislation which is to be introduced by tho Government to give effect to its arrangement must bo most carefully scrutinised.