HONESTY OR PLUNGING?

Dominion, Volume 6, Issue 1775, 13 June 1913, Page 6

HONESTY OR PLUNGING?

STATE LENDING:

\HON. J. ALLEN ON HIS CRITICS.

A FORCIBLE REJOINDER.

Some criticisms of tho State Advances Department, whioli have been published lately,, ware brought under the notice of tho Hon. Jas. Allen (Minister for Finance) ■fast evening, "In the iirst place," said the Minister, referring to copies of the articles in question, "tliero is a suggestion, here wnich. is a misstatement, and „ misrepresents the position. It is suggested that we have altered the proportion that arm an can borrow. There has been no alteration whatever ot the law" in tnat respect. It remains exactly as •it was. Tnen it is suggested that becauso • ■ithe Reform. Party were in power, certain -men who applied for loans have been offered less tnan they applied for. Tno administration of this money is in the Jhanas of the Stato Guaranteed Advances Board, and the Government does not ini Jluence it in any .way-whatever. Wo do jitit interfere with. the board.- They are administering tho Act just as they did b'e- ' fore. I am not going to say- that there ,vero not extravagances under the old , scheme. I 'have hadi dozens and dozens of applications before me which came not ,to this.Government, but to the previous one, for amounts to be borrowed. Some Krf them have been rejected altogether; others ..have been reduced.', It was a '.common.practice before wo came into office, and must .of necessity be the practice now.-. It is incompatible_with safety lor this Department to lend to everybody ,wiiatever they may ask for. Securities -ih'ave to be valued, and in the interests of ,tho taxpayer and of tho State we have ■io guard against lending money to. people ,wuo lave not got sufficient security. .Then, it' is suggested that it is' all nonsense about raising the maximum loan (which may be borrowed'from .-tho Advances to Settlers Branch from £500 -to yiGOO. 1 They can make what suggestion they like, ■It is a fact that the amount . 'lias 'quite recently been so raised, and any 'settler who wants to borrow .£6OO, and ;iCan give secilrity, and comply with the (necessary conditions, will have his application considered by the board, and I ihtlve no reason to doubt that the board iwill grant his application. We raised the amount after obtaining the money necessary to enable us to do so; we could 1 not do it before because we had not got the money. "It is alaj truo that the amount that a !man may Sorrow from the Advances to jWorkers' branch has ' been raised from ' '.£3OO to .£IOO. I am quite sure that the board will favonrably consider the appli-cation-of any • worker who has a legitimate claim to a loan of JMOO, and can Comply, with. the conditions. . "Absolutely Disgraceful." - "I want it to be understood," continued the Minister, "that when we came into office the state of these accounts was / absolutely disgraceful. ' In the caso of loans to local .authorities, there were commitments for £770,000, and provision bad been made for less than. ,£20,000. That is what we. were faced with. The-pre-vious Government had speculated on a source of supply which' failed absolutely. There was no money available except [what we could borrow, either in New Zealand or abroad, - to meet Ihe commitments of those who went bejore.'.us. TW° have 'not stopped tho advances to looal authorities altogether. (\Vo have altered the law to make special provision'for tho more needy local bodies, and have adopted an entirely new principle which , the late Government had cut the throat of in amending the Loans to Local-' Bodies Act. The Government is assisting needy local bodies by itself finding one per cont. per annum by way of •sihKin'g'fUhdS'on their loans. Sjn.ce wo obtained money we have sot aaido i! 30,000 for ■ this purpose. "Regarding loans to- ordinary local bodies, wo have provided for what wo deem the most urgont and necessitous. Wo are helping-the most needy man, and if another who is not so needy does not like it,' I want-to-know what- he would havo to'say if wo were to' give it to him and' leave 'his needy brothor unhelped. The position to-day is that wo have reduced tho commitments from .£770,000 to .£516,000. That is the amount, of my commitments, and 'nstead of having less than tE20,000 'to meet theso commitments with, I have got .£352,000. I have Jiot - got enough to meet all tho commitments; I - can't • get it. That is why we cannot launch out , and lend to. all these local bodies in, the' wild way that was done in the past. Under the old system tho country wa3 losing money every year. ' We reduced this loss last year to i£C23. We are now, in a sound position, and if the 1 country is honest with itself, it' will keep us in office, to keep it in a-sound position. And. if tho local bodies are honest with themselves, they too will, determine that things jfoall bo jliopt upon a sound basis. "Let us Fight the Thing Out." 1 TWith' regard to advances to settlers, I ■Sifave -under consideration now the possibility of making a further alteration in 'the interests of borrowers. It depends 'mpon how ranch ifc will oost, and whether l I havo money to do it. I ain not going Vto put the country into the state that I found it in, with a huge burden of conx•kitments and no money to meet them 1,-wlth. If tho policy of eome newspapers [is to be that they are to encourage the [country to plunge into, debt and commit[monts that wo cannot meet, let us fight (4he thing straight out before the electors Vand see whether tlie country is to be honest, or to plunge. Wo are meeting commitments, and will'meet them, but we .will not plungo for the sake of buying support. It is in my mind every day of my life—l am as keen to help these local bodies as any mnn over was, and I am doing mv level best for them but they cannot expect impossibilities, and newspapers that lead them to expect impossibilities are their worst friends. Long bc¥ore wo came into office tho previous Government had reduced tho amounts they were lending to local bodies. Wo Sid not commence the reductions j they ad to do it out of sheer necessity themselves. They could not keep on at tho •pace that they had been .going, and had to reduce the amounts they wero advancing." i