The DOminion. MONDAY, DECEMBER 16, 1912. THE DOMINION'S FINANCES.

Dominion, Volume 6, Issue 1624, 16 December 1912, Page 6

The DOminion. MONDAY, DECEMBER 16, 1912. THE DOMINION'S FINANCES.

The Minister for Finance on the eve of his departure for London last week was able to give an encouraging report on the finances of the Dominion. It is hardly necessary to recall that when the Massey Government came into office they found that their predecessors had left them awkwardly situated in the matter of finance. The Public Works Fund had been depleted,- and there were commitments for public works and local bodies' loans, which in view of the state of the money market created difficulties not to be lightly regarded. The Minister for Finance and the Minister for Public Works in consequence were forced to proceed with caution, and to curtail expenditure wherever it was possible to do so. Fortunately the country is in a very prosperous state, and this, with the high prices which are being secured for most of our primary products, has had, and is likely to have, a very beneficial effect on the revenue. Thus, before he left, Mr. Allen was able to announce that the revenue is buoyant, and the prospects bright. "At the end of November," he stated to a Dominion reporter, "the Consolidated Fund was stronger than it waß at the end of November last year, and I anticipate that the remaining four months, if we have a season, will give us a larger revenue than we had for . the corresponding four months of last year." This is very satisfactory, especially in view of the cramped condition of the Public Works Fund, for it will enable the transfer of a substantial sum to that fund, and so permit in the early future the pressing forward of an active public works policy. One of the purposes of the Minister's visit to London is to arrange for the flotation of the public works loan of £1,750,000 authorised last session,, and also to make arrangements for the renewal of certain loans falling due. Amongst the legacies left to the Reform Government by their predecessors was the task of providing for the short-dated loans which formed so striking a part of the makeshift financial methods of the Continuous Government. The Massey Government came into office just at the time when it' was necessary to take steps to ar.ra.nge for the renewal of a neavy amount of these loans, and this task has-no doubt added to tho embarrassment of the new Minister for Finance in going to the London money market at the- present time to raise the fresh' loan urgently needed for. public works purposes. It is pretty generally admitted now that this policy of short-dated loans,' which found such favour with the financial wizards of the Continuous Government, is both costly and unwise. It no doubt suits those who handle the loans in London, and who not only enjoy the charges on the original flotation—brokerage, underwriting, etc.—but also tho _ commission ' for the renewals; but it does not make for stable finance; nor is it in the end likely to inspire confidence. Mil. Allen has announced that the Government do not intend to follow tho policy of their predecessors in the matter of loan ralising for short terms, and this should have asood

effect. It is much better for the country so long as it has to borrow, to raise its loans for a reasonable period, and by so doing avoid the necessity of constantly approaching the London money market for renewals as well as for fresh loans. The success of Mr. Allen's mission will naturally depend a good deal 911 the stato of affairs in Europo arising out of the war between Turkey and the Balkan allies. At present the prospects for a satisfactory settlement look fairly good, and the outlook in other respects is not without encouraging features.