TWO MILLIONS.

Dominion, Volume 5, Issue 1262, 18 October 1911, Page 8

TWO MILLIONS.

THE PUBLIC DEBT OVER-STATED. MR. ALLEN'S CHARGE. , PRIME MINISTER'S ANGRY-REPLY-A debate, romorkablo for tho violent language used- by tho Prime Minister, arose in tho Honso o£ Representatives .yesterday afternoon, upon a statement niado during tho Financial Dobato, by Mr. Jas. Allen, member for Bruco, to tho effect that Sir Joseph Ward had over-stated the New Zealand not Public Debt by an amount of two millions sterling, in his Financial Statement of 1911. Tho discussion oponod wihen Sir Joseph. Ward presented a return called for by Mr. Allen, of which- tho following is a summary :— Gross Sinking Net debt. funds. debt. £ £ X Ordinary Debt ... 65,C73,551 2,875,071 G2,797,510 State Guaranteed Advances _. 15,401,238 513,752 11,890,486 Totals '_ 81,078,122 3,389,720 77,688,396 Tho Prime Minister stated that accumulations nnder tho State Guaranteed Advances Act were not, in his opinion, truo 6inking funds, but an internal reserve. Perhaps, in order to prevent misconceptions, theso accumulations, should be shows sPirarately as an internal reserve fund. The authorities giving power to borrow provided for a special' reserve. But, in order to have uniformity, he proposed to ask the Housa to put tho pinking funds and internal reserves under tho State Guaranteed Advances Act _in the saino position as ordinary einking funds. Mistake of Two Millions. Mr. Jas. Allen stated that accumulated sinking funds were shown in. this return as £3,389,736. In the Financial Statement the sinking funds were shown as totalling £1,210,734. There was a difference of over two millions of money in tho accumulated sinking funds. The lion, gentleman had said that it would not bo right to include tho Stato. Guaranteed accumulations as sinking funds. Ho (Mr. Allen) wanted to know when this came into the* mind of tho Prime Minister, because ha had included -these amounts in the sinking funds right up to tho present year. There wa3 no doubt that ft nuVtako liad boon mado in .tJie Financial Statement.

Sir Joseph Ward: That is not so! Mr. Allen: You won't admit it, of course, but any man cau sod for himKolf that the statement of debt and sinking funds in the Budget is oat by over two millions of money, and is wrong! Mr. Allen continued that when the loans wero transferred under the State Guaranteed Advances Act, the sinking funds wore- also transferred. The- statement in the Budget was entirely wrong. Sir Joseph Ward: It ia not! Mr. Fisher: It is not much of a mistake—only two millions! Mr. Allen declared that tho Prim* Minister was simply quibbling in the distinction ho had drawn between sinking fund and reserro fund. Tho Advances to Settlers and other Acts provided specifically for sinking funds, and one of ';ho Acts provided for both sinking fnrJs and reserve funds. Ho was sorry this mistake had' occurred. Sir Joseph Ward: There is no mistake! Mr. Allen said tho hon. gentleman had sometimes mistakenly accused him of damaging the credit of the country. Thnso charges were baseless, but it was calculated ta damage tho credit of the country -when the chief officer of Parliament and the Finance Minister of this Dominion made a mistake, in regard to its debt, of over two millions. This was not a small thing—not one of the numerous little errors which werr> in bo found in the Budsret—but a matter of millions. Some Ministers might think this a small matter, bnt he did not. Sir Joseph Ward: I have made no mistake; Mr. Allen hoped that the hon. gentleman' would candidly admit his error, take back his Budget, correct it,' and sond it out to let the English tmblic and the public of this Dominion know that the net debt was less by two millions than it had been represented to bo in tho last I'inancisl Statement.

SIR JOSEPH WARD'S REPLY. "A'STRING OF ALLEGATION'S. Sir Joseph Ward said tho conclusion lio was coming to every day of his hie was that the hon. member for Brnce was irresponsible. He had deliberately ignored an Act which provided that Stato Guaranteed Advances wore not to be included in tho Public Debt and should be dealt with apart. As tho hon. member knew, it was impossible for tho Minister for Financo to include accumulations under this Act in tho Publio Debt sinking funds. Yet tho hon. member got up knowing this and deliberately ignored what the law directed should bo done. The advances to settlers, land for settlements, Nativo land settlement and loans to local bodies had been taken out of tho Public Debt and shown separately because of tho attacks of tho lion, member for Bruce extending over a period of years. l Mr. Allen waa always calling attention to tho Public Debt of this country and never would-admil' that a great part of tho money had been expended in reproductive, social services. He had set tho loans.mentioned apart to save this 'country from the mendacity of tho hon. member. . Tho Speaker directed that "mendacity" should bo withdrawn. Outrageous Indifference. Sir Joseph Ward withdrew tho word and substituted "outrageous indifference." The hon.' gentleman, ho asserted, had j laboured to create iin impression in England that wo worn piling up our Public Debt. lie never mentioned that JCllij-101,238 was invested in the social services aforesaid, every one of which had a great separate astot set against the;o lonus. 'It was because of tho "outrageous indifference" displayed by the hon. member year by year that ho (the Prinio Minister) had nsktd the House to tako these loans out of the Public Debt, and set them aside- in order to preservo this coimIrv from the attacks of hon. members. Yet Mr. Allen had had tho hardihood to declare timo and again that ho (tho Prime Minister) had made a mistake. Ho had niado no mistake. Tho man who always reflected upon and cast doubts upon tho financial position of this country was the member for Bruce. Mr. Allen: I never damaged it like this! The Primo Minister complained that people ■whom ho styled "phonographs" were fed with information by the Opposition and made false statements from end to end Df the country. Recently he went on. the member lor Bruce had called for a return showing tl>" dates of e.ll debentures falling dun thi;. y;.:ir. Hundreds of copies of this return had been printed, and mail} , hud befn pasted to people in England. This was what the h<m. member for Bru!» had done that session. Mr. Allen:Rubbish. "Would Make a Cat laugh." The Prime Minister coi>''niiMl that for three or four yours tlio Opro-ition had been decrying the fin.-mcial stability of this (wniitry. Their laud-owr/.d journal in Wellington had sent its reporters round duriiii; 'he recent period of financial •;!■■ <*—h<! s:iw t.lie bon.. member for Wdl- •■ ><m N T orth laughing! •fr. Flerdman: You would make a cat •;li! '" I'rinio Minister said that tho jonr- . iijcntionwl hn r .! sent its .i-.l t-u tra'k'siiieu. to try to get t'icm .f.inn tho fact that the bottom owl . P'<! out of the country. ;■. Buchanan: I deny that absolutory! word is better than tho Primo Mimcr Joseph Ward: I don' , - doubt your .h but 1 -ay rliiif oeuan.■•.!. I don't '"n"'.iiii',T aiwut yt.ui , <~j». vfr. "Buoliann.ii: "ion did, sir! You :Vt put me down or bully me! Tlio Prime Minister Kiid hu was not ■tiing to be bullied cither. The Oppolilion luul laboured for years on the lines ho lund indicated, to break the power of tiro Xi'«- Zealand Government. Mr. Eraser: That is whero tho shoo Tho Premier complained that tho statements of the member' for. Bruco .were scat^

terod all over tho world per medium of his phonographs, and thenoo wandered into references to a statement by Mr. Allen regarding the Midland Railway. Mr. G. M. Thomson: Let us clear up this two millions first! Mr. Fisher: Why did you givo lUics-n two different totals of thu net debt—ok; in- tho Budget and one in this table? Sir Joseph Ward said that Mr. Allen had asked for tho total of the not debt in that way in Jiis motion for tho return. The law of tho country said tho debt under the Slate Guaranteed Advances Act had to l>o kept £ep;.rato from tho public debt, and not be added to it. Mr. Allen: But you did it yourself. Sir J. Ward faid he had added tho two together beeauso Mr. Allen nsked him to do so, and then Mr. Allen used it to impose. on those who had no knowledge of financial matters. Mr. Alien had been token to task by the "Otngo Daily Times" in 1908 for saying that llioro was a possibility of the country making default over the Otini tunnel contract. It appeared that Mr. Allen was quite irresponsible about financial matters. Tho rottiTii nsked-for by Mr. Allen was of no use: to himself, his parly, or tho country. It would bo of infinite use to pooplo who wanted to forco down the prico of tho stock of this country when it was to bo renewed. Mr. Buchanan Protests. Mr. Buchanan said ho understood Sir Joseph Ward k> have accused him of circulating financial information about Now Zealand outside- tho country. Ho absolutely denied having done so. Sir Jcseph Ward said ho mado no such statement about Mr. Buchanan personally. Hβ had mentioned Ids name and that of Mr. Herdnian as directors of the Opposition, paper. Mr. Buohauan: I say that the mention of my name was not mndo in connection with any newspaper. Ministerialists: Yes, it was. Mr. Buchanan: I insist that tho lion, member accused mo of circulating financial iivlormution to the detriment of this Dominion, and that I deny. Sir ,1. Ward: I was referring to the Opposition generally. "Absolutely Wrong." Mr. Allen Eaid the Prime Minister had misrepresented him. A return had been presented year after year for several years without any objection on tho part of the Government,, showing tho debentures falling duo during tho current year and tho next year. Ho had never sent'any such return nor any adverse criticism of Mew Zealand to England. Ho liad"'when. in England upheld New Zealand finance. Ho did make tho distinction between tho not debt of tho State Guaranteed Advances and the other debt. Ho asked for both to bo shown in. tho return, but Sir J. Ward, in Ids Financial Statement, had put tho two together in tho total gross debt, and then deducted the accumulated sinking funds of the ordinary debt, but omitted to deduct those of the Guaranteed Advances Debt. Ho then* fore showed the total net debt absolutely wrong, and ho knew it perfectly well. In regard to tho Midland Railway matter, tho position, as he had said, was that a contract was let for three-quarters ot a million, and a voto wus taken at tho end of tho first year for niuch less than thr.i. sum. He-nce, if tho Primo Minister had tan unablo to get a further loan authorised there must have been default Sir Joseph Ward said the information asked for by Mr. Allen in regard to debentures would not bo supplied by any financial firm or any other Government, but tho Government of this country had had to protest year after year against demands for information that it was desirablo to keep confidential. Hundreds of these returns were posted to England. Representatives of investing houses sent every item of such information home to their principals. He could cable to one of those houses and ask them whether they had received the return about the debentures, and they would reply that they had. Mr. Allen: And what- harm if they had ii.? Sir Joseph Ward replied that it would er.nhle financial houses to make a great deal of money out of New Zealand.

"Getting Frightened." Mr. Eisher: Why furnish tho return, then? Sir Joseph Ward: Because wo have got the most unscrupulous Opposition in this country that thero has probably ever boen in any, Parliament. (Ministerial "Hear, bears.") Opposition members: You must be getting frightened. Sir Joseph Ward (excitedly): I'm not frightened of tho wholo lot of them. An Opposition member: You'll be out at Porirua soon! Sir Joseph Ward: It would be tho best place for yon. Hut I don't bolievo you would be admitted among tho inmates there. The Primo Minister went on to say that the information lie ii.ad been speaking of should not bo given until all the renewals had been effected. Sir Harry Atkinson hiyl said so. Who was this information going to do any good to? Not a living soul except men who wanted to invest in our stock at as low a price as possible. They should not havo known until tho underwriters had finished the transaction. Referring again to what Mr. Allen had said in 1908, Sir Josenh Ward said that there was a clause in tho Otira tunnel contract providing that the contract could bo cancelled at any time, and thero was therefore no danger of default. Is the "Year Book" Treasonable? Mr. Allen said tho Prime Minister had accused him of getting returns to advertise the dates when loans would fall due, and to injure in that way the credit of the country. Yet tho Official Year Book had published for years past tables showing tho dates of tho maturity of loans and dates when tho loans would fall due. If that was not advertising Sir Joseph Ward immediately sent for a "Year Book," and thore was a nauso while he stood with it in his hand. "Yes —" he said. "Yes " continuing to study the "Year Book," and, after a pause, "Yes." "Ycs ( " he went on, "tho 'Year Book,' among other things, gives the dates of Iho maturing of loans in 19-10." Mr. Allen: Every year. Sir Joseph Ward: It does not give the dates of the renewal of loans. Not a single one. Mr. Allen: I*ok at the ne.it table Sir Joseph Ward: It does not giro Hie dates of renewals, and they absolutely mnr.ot bo known unless a return is tabled. Mr. Allen: Tt givps the dates of tho maturity of tho Joans. Sir Joseph Ward said tiie dates of conversions were only given when they were given in a return to the House. Mr. Allen: You can't give thoso till thpv .ire done. "Why did you publish it?" asked Mr. Allen, "referring to tho information in tho "Year Book."' The Speaker called on the next business.