THE PRIME MINISTER'S REPLY.

Dominion, Volume 4, Issue 1237, 20 September 1911, Page 6

THE PRIME MINISTER'S REPLY.

Railway Revenue

DEFENDS HIS FINANCE. MORE- ABOUT THE BLACK TAIIPHLET. Sir Joseph Ward roso at 3 o'clock to reply. He said that the Opposition had pointed to minor errors in the figures of the Budget, but had generally agreed with the proposals contained in it. The chief effort of tho Opposition for the last 20 years had been to cast discredit upan the financial position. They tried to show that the late Jlr. BaUanee was wrong in his conversion operations. They had said that tire surpluses were only paper surpluses, and they had found fault with the ilotaiion of every loan. They hml complained of tho want of information about loans, and when they had had to abandon that th"y had fallen back upon criticism of tho five million loan. The Opposition had gone from end t* end of tho country saying that the Government, was borrowing too much money. On top of that one of the first members who came to him upon his return-to ask for a largo sum of money for his district wm tho Opposition Whip. Tho Leader ti£ the Opposition had said last year that he did not believe it was possible to raise enough money to carry out tho proposals outlined, in the Financial Statement, but that, if the people of this country did not put the brake on. it would bo a Rood thins for the country if the money-lenders did. .Mr. Zinsser: Why don't you rjuote tho whole paragraph? Treasury Bills. 'The Premier went on to say that tho member for Bruce had been guilty of cross misrepresentation in regard to Treasury Bills. In his desire to misrepresent, the hon. member had deliberately ignored a sum of <£53,000 which was in the hands of Government officers for various purposes and beyond tho control of tie Treasurer. The total amount' of Tiv.-isury Bills which could be legally is-inr-d in one year against revenue was jei.nnn.OOO. If the ,£700,000 had been paid, as the member for Bruce had suggest, rd it should have been paid, the Government could not havo paid ■ its way in the month of April at all. The ■CTO.OGO of Treasury Bills that had been ; carried on from year to year wcro the outcome of the financial difficulties of the i predecessors of the Liberal Government, ■ and had become a part of the permanent r debt. The member for Wellington North ■ had spoken in ignorance. If the .£700,000 > of Treasury Bills had existed on March ■ 31 last the "Government would have had to ■ issue .E1,100,000 of Treasury Bills before > it got tho revenue.in April at all. Tho > law said that Treasury Bills must be i issued., ■ to iin amount not exceeding > £{ 000,000, in anticipation of revenue. If tho ,£700,000 of Treasury Bills had not

been paid off instead of £100,000 being issued in the June quarter the full amount required by law would have had to be issued for that quarter alone. The .1:700,000 had■ Jicoti paid oil' from permanent debt. Why had the Opposition waited until the present juncture to lay _tliis charge in reference to Treasury Bills? They had gonu roiiud the country attempting to make out that the five-million loau was a failure, and that taxation had increased, though it had not. They wero endeavouring to decry and discredit and damage the credit of the people of this country apart from the country itself. The members for Jiruce, for Wellington Central.and for Wellington North had accused him of saying that the more tho country borrowed the less interest it paid. He had said nothing of the kind, but had simply pointed out that owing to the incrciso ,hi population the debt per capita, was less than in earlier years. Touching upon iliis slalemeut on page six of tlie Budget, in reference to borrowed money, tho member for Bruce had accused him o£ being four millions out in reference to railways. The fact was that he was dealing then with borrowed money, and not with sums that had been transferred from revenue. In this and a number of other items, the menibsr for Bruce. bad taken the amount transferred from revenue, ignoring the fact that borrowed money only was beins dealt with, in a grossly unfair way. The member for Bruce had confused an amount advanced to local public bodies irith the amount deducted for telegraphs, aud he was only about three millions out.

In tho Statement ho had shown, in a general way, .that the fault-finding criticism of the Opposition was not borne out by facts. Enormous efforts had been made to show that the increase in railway revenue was not due to prosperous trado in this country. The honourable gentleman had descended into the abyss of pessimism, and had laboured to show that the increase was derived from 4-1 additional miles of railway, and increased rales. Was not this hair-splitting? As to public buildings, ho was surely entitled to say that they were earning what would have been paid in rents if the country had not had owned the buildines. Then a member had asked what tho position was when the buildings wero burned? He had ignored the fact that for years- sums that might havo been paid in insurance premiums had been saved. If he had cared to show immigration and harbours and lighthouses as in-terest-bearing items of borrowing he could havo shown another three millions as interest-bearing. The lion, member had accused him of damaging tbo credit of tho country. The charge rested upon one or two slight variations in decimals, two of them in his favour and one in favour of- the member for Bruce. The only honourable gentleman in this House who had ever suggested the possibility of this country repudiating its liabilities was the hon. member for Bruce. If he had not used the word "repudiate" ho had used a term that was quite similar. Mr. Massey: It was quite different. "What about tho five million loan?" continued the Prime Minister? Mr. Eerrics: We have not heard anything about it yet. The Prime Minister: "Except misrepresentations by the hon. member." Ho congratulated the hon. member on being stopped at Hokitika, because, apparently, ho had said a littlo too much about borrowing. The Opposition members and their Leader had been talking limited borrowing, and because he talked borrowing among tho genial West Coast people, the member for Tauranga was sent home. Such talk was not approved by tho Cassandras of the Opposition. Tho hon. gentleman complained that he had not got tho whole of the details of the loan. Some Telegrams. At this there was a little Opposition laughter, to which tne Prime Minister responded with a somewhat' surprising outburst: Oh, ho, ho, ho, no; ho, ho, ho! "Tho hon. gentlemen havo not got the information," he continued, "because we have not. got it." Ho proceeded to nuote from telegrams which had passed between himself and the High Commissioner. Ho telegraphed to tho High Commissioner on July 22: "When may I expect details of cost of raising loan of £5,000,000 ? What has teen done to bring loan moneys up to full amount authorised?" Tho reply to this was: .''ln answer to your telegram Jnly 22: Loan account can bo closed as soon as further stock amounting to £142,000 h«s been disposed of; but at present no market for. Secondly, up to present loan receipts £1,073,759. Expenses .£110,408. Net return £% 6s. Id. Sales of stock when effected c-a: , only vary this net return slightly. Thirdly propose to sell abovo stock as soon, as 97£ obtainable, which would net 9GJ per cent. Do you concur?"

As there was no immediate urgency for tho money, the Prime Minister continued, the High Commissioner was instructed to hold for a better prico, and, so far, no further offer had como to hand. It would bo seen, therefore, that until tho, accounts were finally closed and forwarded iq the Dominion, it was impossiblo to give details showing how the expenses were made up. Now, ho asked, what about the ho! ho! Mr. Massey: What date was that? The Primo Minister: July 22. Mr. Massey: Two months ago? The Prime Minister: He has been told to advise as soon as ho has sold it. As soon as he has got tho information ho will send it to us. What had been the dire suspicion that the Opposition had been affected with all through? It was a suspicion that the finances of tho Liberal party were wrong. (Hear, hear.) .In further reference to injuring the credit of the country, mentioned that on the eve of tho Boating of the last loan the Black Pamphlet had been circulated amongst the financial houses in London.

.Mr. Massey (hotly): What have we to do with it? '

Sir Joseph Ward: I am not saying so. I am saying what is a fact. They were circulated in hundreds, and were given to people throughout England. I am not accusing the hon. gentleman of circulating them. That »as done by some peoplo ■j damage their country through me. It is absolutely on incontestable evidence. What was it done for? No other country, ho added, had done as well as New Zealand had done since the raising of the five million , loan. Yet a short time ago a suspicion had been created in New Zealand that the Bank of New Zealand had financed a large portion of that loan. Tho Bank of New Zealand bad only token .£IOO,OOO of it as an investment iii tho usual way, and within a few weeks the bank had. sold at a profit to investors in the Old Country. Tho Dominion did not lean upon tho bank for anything. The State Note Issue. In regard to the State note issue, an attempt had been made to convey the impression that he had done something now that ho objected to Mr. Hogg's doing. Ho referred to an interview Mr. Hogg had given at Wanganui, in which he advocated a paper currency by tho Government to pay for public, works. Six mouths afterwards ho had declared in favour of the Canadian system, but not at the lime of the Wangitniii interview. Ho (Sir Joseph Ward) had given instructions in 1894 to prepare a Bill almost identical with the present proposal, but it was considered undesirable, andU be could not get the consent of a majority of his colleagues to it. What he now proposed whs to have a cold .security behind the- notes to be issued to tho banks.

Tim Prime Minister concluded by congratulating tho member for Christcliurcli North, Mr. L. M. Isitt, upon his speeches that evening. Though different members, upon either side of the House, might not agrco with all that he had said, the Prime Minister opined that ho would be a, [earless and able member, whether he worked with tho Government or with the Opposition. The Prime Minister declared himself ready to continue for half an hour if the House would give him permission. Mr. Massey said he had no objection, provided the lion, gentleman did not propose to take.the first item upon the Estimates at that sitting. The Prime Minister: In that event we will take the first item. The House immediately went into Committee of Supply. Mr. Hcrries took an opportunity, when the Estimates were being discussed, to state that tho Prime Minister had been misinformed, as he (Mr. Herries) had not been "withdrawn" after speaking, at Hokit.ika. He spoke afterwards at several places. _________

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