MR MASSEY ON STATE

Dominion, Volume 6, Issue 1742, 6 May 1913, Page 6

MR MASSEY ON STATE

FINANCE.

HERITAGE OF THE PAST. WHAT GOVERNMENT WERE FACED WITH. PRESENT POSITION. (By Telegraph—Special Correspondent.) Auckland, .May 5. Tho statement mado by the l'rimo Minister at Auckland on the financial situation was so important that some details, in addition to tho Press Association references, will bo interesting.

Mr. Massey said .that tho surplus which the Government had been able to declare from tho Consolidated Fund of approximately ,£700,000, would now be transferred to the Public Works Fund. In tho course of some remarks illustrating the difficulties that had faced tho Government during tho recent stringency tho Prime Minis'fer drew attention to a Treasury document, signed by the secretary of tho Treasury (Mr. G. F. C. Campbell), showing tho position at August 31, 19IL'. Tho total commitments (loans actually granted, but not paid, over and not included in the provisional approvals) amounted to .£1)70,195. There stood against this a total available of .£17,110, leaving a deficit at the end of August amounting to .£053,•JBS. "In addition to this," said .Air. Massoy, "we Jiad to provide money for the carrying on of public works, for lands .for settlement, for advances to settlers, and to workers for workers' homes, and for nil the minor matters for which >Oan money is used, so some idea of our difficulty jnny bo obtained.''' '

Post Office Bank Deposits, The success of the Hon. Jas. Allen in London (Mr. Massey said) had been a very important factor in straightening matters out, and things would no doubt be much more satisfactory in this respect (hiring the next few months than they had been lately. Ho hoped, before long, that it would be possible to raiso tlio limitations upon loans to local bodies, advances to settlers, and advances to workers. Olio of the effects of tho financial stringency, remarked the Prime Minister, had been the falling-oil' in deposits in the Post Office Savings Banks in comparison with (he withdrawals'. During the last year of tho Ward Government the amount which it had borrowed from the Savings Bank had been .C1,M1,000. He had not the figures complete to March 31, but in the period of between seven and eight months from July" "10, 1912, to February 28, 1913, the present Government had only .£2-15,000 available to draw upon. However, the Government had increased the rate of interest a short time ago, and this would no doubt have a considerable effect upon tho ratio of deposits to withdrawals. As money was becoming dearer nil round, to increase the rate of interest was also tho right thing to do. Balkan War and Dear Money. It hail to be remembered, continued Mr, Massey, that money was dearer ami scarcer in almost every country in tho world than it wns 12 months a'ro. A variety of causes had been at work, and not tlio least was the European wnr. Ho did not expect that money would bo cheaper in London for some time, and if if was not cheap in London, it certainly could not bo cheap in New Zealand or anywhere else, though he had, as ho had said, every confidence that the worst of the stringency was over, and that, from now onward, nioro money would be available for development purposes. The Folly of Short-dated Loans.' Tho Government had still one trouble to bo dealt with finally: tho falling due, before t,he end of next year, of between; =£9,000,000 and .£10,000,000 worth of shortdated debentures. Mr. Allen had already had this matter in hand during his visit to London, and Mr. Massey felt justified in saying that, unless some linforseen difficulty cropped up, 'satisfactory arrangements would be made. But what was happening now showed the absolute folly of raising short-dated loans. He quoted the case of the loan of last year which was raised for- a term .of two years. "All the formalities must be gone through again and almost tho same costs and ciiarges must be reckoned with as in the first instance. The Prime Minister produced another Treasury document showing the actual cost of the last three big loans. The present Government's loan raised a few weeks ago would cost the people J!i ss. Gd. per cent; the four and a half million loan of 1911, which falls; duo next year, cost .£5 2s. 9d. per cent., and the five million loan of the previous year cost M 12s. B}d. pel - cent. "T'heso are not my figures," said Jlr. Massey; "they are supplied' and siened bv tho Secretary of tho Treasury. They speak for themselves.'"