LOAN BILL.

Dominion, Volume 7, Issue 1871, 3 October 1913, Page 4

LOAN BILL.

PARTY FIGHTING AGAIN; MEMBER FOR AWARUA REMINISCENT. Tho Hon. J. ALLEN moved tho third reading of tho Aid to Public Works and Land Settlement Bill. SIR JOSEPH WARD (Awarua) said that in the passage of the Bill history was repeating itself, in a way that was to him very amusing. .He was mindful of his own difficulties as Minister of Finance, and of tho Hon. Mr. Allen's frequent condemnation of his borrowing. Now that samo honourable gentleman was submitting a proposal to borrow £1,750,000, to bo borrowed for the same purposes as tho loans which ho had (previously condemned. Surely Mr. Allen, in his contemplative moments, must admit to himself that the late Treasurer had beon right, and that he (Mr. Allen) had been wrong in his criticisms. Now Mr. Allen must admit that it was impossible to carry on the work to develop this country without borrowing largo sums of money. For himself, ho had always realised this, and ho would support Mr. Allen's Bill. Whilo honourable gentlemen opposite had condemned tho .expenditure of the late Government on a new rajlway. station at Dunedin, post offices at Auckland and Wellington, and the extension of Parliamentary grounds Mr. Lee: No. Hutt Road and Qtira Tunnel. Sir Josoph Ward declared that ho had been much amused to see theso same gontlemen sitting mute and placid w'hilo money was boing borrowed, and demanding, some of them, a new railway station for Wellington. "A Falso Position." There was no doubt that they had got into a false position in regard to publio affairs in this country. Largo amounts would be required in future for expenditure upon, development works and under the cu'cumstances it savoured of hypocrisy to declaim against borrowing. The idea had been spread abroad that New Zealand was the most debt-ridden country in the world. By those who had disseminated this idea, no notico had been taken of tho fact that the .New Zealand debt and the debts in tho different - Australian Sltatos were raised upon different foundations. In the first place New Zealand had been faced by ■ tlie cost of a Native war. None of the countries with which New Zealand was compared had devoioped as rapidly as tho Dominion in a given term of. years, and this country had State institutions w'hioh the other countries had not. In 1910 tho Primo Minister had said that there was no reason why the Public Works Statement and Estimates should not be brought down certainly within a month of the introduction of tho Financial Statement. Later, the Prime Minister (then Leader of the Opposition) had said that tho Public Works Statement should bo brought down about the end of August. 'He invited tho Prime Minister to revoke his former utterances on the subject of borrowing and other matters. Finally Sir Joseph Ward stated that ho forgave his political enemies for all the criticisms they had levelled against him in tho past. Borrowing Never Condemned. Mi-. W. 11. D. BELL (Wellington Suburbs) replied to tho statement of Sir Joseph Ward that certain Wellington members wero now agitating for expenditure on : Wellington railway station, who had'hitherto opposed borrowing. He denied haying < ever condemned borrowing, and ho believed that no member of tho party had over condemned borrowing. What they had condemned was waste. One. of the instances of waste was oil the Hutt Road. Tlie estimate for ihis was £100,000, and the cost had been much moro. Certainly there was an explanation offered, . but it was - not; in his opinion an explanation sufficient to account for all the discrepancy. Wellington members, too, were accused of inconsistency in asking for a new station while condemning tho Dunedin' station. But Wellington members did not want the same sort of station as they had. in Dunedin. Ho would not support a Ministry who proposed to build such a Btation, because" ho believed_ that station was too expensively* built. Sir Joseph Ward : I would do it again to-morrow if I had to. Mr. Bell said ho did not, accuse the. honourable member of bad. faith. No' doubt the honourable gentleman would do it again as he had said. With rogajil to Parliament Buildings, provided tho country got full value for the money expended, he dlid not object to a heavy expenditure on Parliament' Buildings. Ho agreed that we must have Parliament buildings which wero a credit to the country, , and he had always said so. but he disagreed with the removal or Government Houso to the other end of the town. He thought that arrangement was unnecessary, and ho did not think there wero many Wellington citizens who did not begrudgo tho hativo trees destroyed in Parliament House grounds. However, now that tho scheme had been embarked upon, ho would support the Government in carrying it out. Mr. Forbes: Are you going to get tho Wellington railway station this year? Mr. 801 l said ho did not think so. but ho would support tho Ministry if they made 6iich a proposal. /, 3lr. Massey: You will get it next year. An Uncalled-for Interiectlon. Mr. Bell went on to discuss borrowing and election recriminations, saying that he was not responsible for any of tho latter. . Mr. Buddo: What about "pickings' ? 'Mr. Bell repeated (as he has pre- , viously done in the House) that ho nad not used the term "pickings" in any offensivo sense. Sir Joseph Ward had aoquittcd him of all such intent, arid if tho honourable gentleman would gay now that ho felt on acoount of that first speech m his "(Mr- Bell's) electiou campaign, ho would repeat again his explanation.' Sir Joseph Ward: I accepted your explanation. Mr. Bell said it was manifestly unfair for members of Sir Josoph ard's party to persist in their unfair references to the statement ho had 1 mado. More Than His Share. SIR JOSEPH WARD said he was very sorry the business had beon raised, because ho did not want to go into tho past. He had already on a former occasion accepted Mr. Bell's explanation, and he did so quito sincorely. But perhaps ho might be-sllowed to say that it was beyond all question that reflections had been-made against him by way of innuendo. ' , Mr. Bell: Not by me. Sir Joseph Ward: I accept the honourable gentleman's explanation. He had never, he said, whilo ho was in public life received anything except what was authorised by Parliament in his official position. Only in tho last few weeks he had given instructions to his lawyers to proceed against a gentleman who made a statement concorning hint, and circulated it amonj; members of tho House. Of course, public men were all subject to this, but he bad had a little more than his sharo of it. Mr. Doll expressed his entire satisfaction with Sir Joseph Ward's generosity, but ho suggested that as Leader of tho Opposition lie should restrain the members of his party from making unfair refereno# to a matter already fully explained.

Mr H. ATMORE (Nelson) said tbat mombers of tho Reform party in the past had protested, not against oxtravagant expenditure of borrowed money, but at tho amount of borrowing. They had proposed to put a brake upon tho borrowing of othor people, but they wero not prepared to put a brake upon tho borrowing of their own Government. An Aggrieved Ex-Minister. Mr. G. AV. RUSSELL (Avon) asked what tho Minister of Finance had intended to convoy a few evenings earlier by tho statoinenfc that tho Mackenzie Government during its term of-office had added £2,574,690 to the Publio Dobt. Ho claimed that three-quarters of tho expenditure for tho last financial year should bo attributed to the Massoy Government, and tho remaining to the Maclcenzio Government. On this basis ho stated that tho Massey Government during tlireo years (presumably,' ho meant three quarters) had spent £4,391,639, while the Mackenzie Government had spent £1,150,774 during the, one quarter for which it Was in powor. What was the country going to think, Mr. Russell went on to ask, of a Treasurer who spent £4,391,000 of loan money, and then told the country that his expenditure of loan money amounted to £2,925,460? If Mr. Allen wanted to take tho place that' his abilities entitled him to take, ho would have to abstain from' misrepresentation. He eared nothing for any return tho Minister might produce, lie continued, because any return could bo got from the Treasury that a Minister desired. _ Mr. Nosworthy: Is that how you did it? Mr. Russell: Yes, that is tho position of tho lion, gentleman. The ■ hon. gentleman has only got to tell the Treasury that he wants a return to represent a cortain view, and tho officers carry out instructions literally. _ They don't know what use, ho, is going to mako of it. Dr. Pomare: Somo of your old trioks, I suppose! Mr. Ryssell made further comparisons between tho finance of the Mackenzie Government and that of tho present Administration. Ho stated that tho Mackenzie Government had left a great deal moro cash in hand than the Trea-. 'sury how contained, and that when it went out of office no Treasury hills had been issued, whereas now there woro a groat number of. "kites" abroad. Mr. Frasor: Why'not? Mr. Russell said that it showed the difference between the finance of the Mackenzie Government and that of tho Government now' in office. _ There had, ho said, been largo borrowings Dy the Government since the three million loan was floated, and sine© tho end of tho financial year. Ho was glad to learn that the moro recent loans had been secured at 98J. Mr. Allen: That is not correct.' Mr. Russell quoted from Tile Dominion report of what Mr. Allen had said, which was that tho lowest price received was 98}. Mr. Massoy: We got 100} for somo of it. Mr., Russell said he thought it extremely probable in view of this, and of the moro settled state of international relations in Europo, that Mr. Allen would bo able to renew tho shortdated loans of tho late Government on bettor terms than could havo been secured when they were raised. While criticising the Government, he did not object to the Government policy of borrowing money. Ho was in favour rather of increasing borrowing, especially for railway construction and loans to settlers. Mr. J. V. BROWN (Napier) said ho would support the Bill, but ho trusted the Government would, _ in expending tho money, divldo: it fairly among tho' different districts of New Zealand. Ho went on to repeat much that ho had said in Committeo about tho Government's failure to push on tho construction of the East Coast railway at the Napier end. The East Coast Line. Mr. G. V. PEARCE (Patea) said ho hoped tho Government would not lay anotner yard of railway until they had bought all tho Maori land along the route. Tho opinion of tho settlers at tho Napier end- of the line was that they would .be 'much better servefi niow if a good metal road wero provided for them. He know tho line, 'and he know the railway would not pay until it got through to Gisborne. Only through traffic oould pay, because all except a little country along tho route was fit for closo settlement. Tho rest was sheep country, and not very good country. However, he thought Gisborne should bo given railway access with tho rest of the North Island, and in order that this should be done as soon as possible, he would suggest that all the money available should bo spent on tho lino going northwards to Opo.tiki. Mr. Pearce went on- to defend himself from the cliargo of inconsistency in advocating borrowing now when he had opposed it in the past. Ho took up now the samo position' as ho had taken lip always:'that ho was not opposed to borrpwing for "'reproductive expenditure. Ho was opposed to expenditure ,on such works as the Otira Tunnel. Private Borrowing. Mr. G. WITTY (Riccarton) 'said that tho effect of tho i freehold policy of the Government had been that seven millions more had been borrowed on private mortgage during the last twelve months than during the .previous year, .The private debt of the Dominion now 'amounted to £97,861,000. I Mr. J. A. HANAN (Invercargill) spoko of tho inconsistency which ho liaa alleged against the Government . tho provious evening. Enjoying the Fight. Mr. W. D. S. MAODONALD (Bay of Plenty)' said tho Minister of Finance had started out the debate looking tor a fight. ' Mr. Allen: Certainly. I'm always ready for a fight. ■ e Mr.- Mac Donald: Well, I hope tho Minister has enjoyed it so far. Mr. Allen: Yes; I've enjoyed it very much. ' ' i Mr. Mac Donald went on to challenge Mr. Wilson's statements regarding waste in Public Works expenditure. Mr. P. C. WEBB (Grey) replied to tho statements of members against tho Otira Tunnel work. He recognised that we could and must yet absorb a great deal moro money for publio worlds in New Zealand. He would like, however, to see less borrowing dono, and to see tho money raised by taxation. Mr. 11. G. ELL (Ohristchurcli South) put on record the prospectus of the loan raised by tho present Government in the early part of this year. Ho claimed that it vindicated tho financial policy of the late Administration. Mr. J. PAYNE (Grey Lynn) deprecated the outcry, prevalent during last election campaign, againsi tho growth of our Public Dobt. Ho was advocating a Stato bank as a reliable and safo sourco of revenue, and preferable to borrowing. Ho was cautioned several times for continuing a lino of argument which was not in point on tho question before tho House, and finally, when ho persisted in talking about State banking, Mr. Speaker ordered him to resume his seat. THE MINISTER IN REPLY. REFORMS EFFECTED. MEMBER FOR AVON REBUKED. The Hon. J. ALLEN roso to reply at 1.8 a.m. 110 defendod his action ill moving in 1909 to reduce the item, "ill respect of other public works by £200,000," stating that ho did so as a protest against the largo increase mado in that item. He hod protested tit times tvhon in Opposition against oxcessive

borrowing, and against the purposes in which tho loan money was spent. In .the past repairs to public builaingß and maintenance of main roads had been paid for at times out of borrowed money. In 1909 expenditure upon immigration was met out of loan. Thero had beon- extravagant expenditure in other directions, notably upon tho Parliamentary Buildings and upon tho new Government Noqso. Tho proposal which Sir J. Ward had made, as Minister of Finance, to spend half a million a year upon the development of water power was indefensible. Could Sir Joseph Ward say that it was a sound policy to uso borrowed money to erect public buildings, lot them be burned down, and' then re-erect them again out of borrowed money? This had been put an end to. So also had the practico of buying Native lands with borrowed money, converting them into Crown lands, selling the Crown lands, and paying the proceeds into ordinary revenue. Tho Minister continued that in reference to the sinking funds established by Sir Joseph Ward ho had attacked only the "collaring" of tho Maori War Sinking Fund to easo the Consolidated Fund. Did Sir Joseph Ward believo what ho had said at Dovonport, tli(iL the bottom would drop out of Now Zealand' if it ceased borrowing? "I have more faith in my country than to boliovo that," Baid Mr. Allen. Mr. Russoil's EfTcrt, The member for Avon, ho continued, was developing, slowly, as a financial critic. Ho had taken advantage of the time before 9.30, when tho galleries wero full, and wnen ho knew that tho, press would report all that he said, to make the most astounding Bpeech that had over been heard from a man calling himself a financial critic. _ Mr. Russell had accused him of saying that tho Mackenzie Government bad expended loan money amounting to £2,574,690. Upon being challenged, Mr. Russell quoted from a nowapapor a correct report of what ho (tho Minister) had said, namely, that in tho three months from, March 31 to July 31, 1912, the inoreaso in the Publio Debt amounted to £2,574,690. These were the three months for which the Mackenzie Government was in office. During tho next nine months, when the present Government was in oflco, the increase in the debt amounted to £2,924,960. Tho member for Avou had stated that Government members had accesß to documents wbioh Opposition members' could not got. Would it be believed that tho member for Avon had come across to him on the previous day and obtained the document which he had criticised that evening? The Minister added that he had offered to let Mr. Russell take away the document, and copy it, but tho v latter had said_ that it was sufficient to road it. The incorrect statement of the member for Avon had got a start, and he (tho Minister) could only do his best to overtake it. Mr. Russell had said that any document could be got to suit a Minister's viow. Mr. Russell had been a Minister of the Crown, and no doubt was speaking from experience. Mr. Allen said that ho had never asked any officer to mako out a document to suit his view, and ho never would. He did not believe any officer would do it. An Inaccurate Crltlo. The misrepresentations of the member for. Avon' would compel him to put tho facts on rccord. On June 30,1912. the balance in the Consolidated Fund was £782,547. and the liabilities wero £540,445. But on Juno 30 last the balance in the fund was £709,000, and the liabilities only £289,000. ' In the Publio Works Fund a year ago tho balanoe was ■ only £299,881, and when tho honourable gentleman read out that there was over a million in. ,the Public Workb. Fund'lie did not stixie' -ihat the figures included one million to pay off debentures. Tho whole criticism of the honourable gentleman fell to the ground when it was pointed out that no had read returns in tho iGazotto, and did not understand them. With respect to Treasury bills, did the honourable gentleman know, or didn't he know, that when he was talking of the lialanoe, he was talking of an amount which did not include Treasury bills, but that Treasury bills were deducted in order to get at that balance? There wero no Treasury bills when tho Mackenzie Government went out of office in 1912, but it was vory soon afterwards that some had to bo issued. Did tho honourable gentleman not know that wero Treasury bills issued every year in anticipation of revenue? . About Mortgages. . The member for llicciirton thought he had made a great point about mortgages, and the large increase in the rato of intorost. It would not have been' wonderful, if tho rato of interest had increased, because tho rates of interest had increased all over the world.' -But there were facts, about mortgages which were worthy of note., On March 31, 1912, tho mortgages up to 4i per cent, wero all held by 66(i people, but at March 31, 1913, mortgages up to this rato wero held by 2276 persons; up to 0 per cent! (not a vory high rate now) mortgages wero hold on Maroh 31, 1912, by 15,633 people, and on March. 31,1913, the number holding 6 ger eont. mortgages was 17,132, Thero had not really boen any increase in tho rato of intorest. Thero were many mortgages registered as.being at 8 per cent, also, tat lawyers knew that the high rato was not always charged. The rate actually- paid was 6 per cent. ' Explanations. Sir Joseph Ward said tliat. the Minister had. incorrectly quoted his speech at Dovonport. He denied tho construction put upon it. It was also incorrect to imply tiiat he had not provided for the Maori War sinking fuud. Mr. Allen: I did not say that. Sir Joseph Ward contended that payments from tho Consolidated Fund to tho Public Works Fund had moro than balanced the payments out of loan money to which Sir. Allon had taken exception. Mr. Allen said that he had correctly quoted Sir Joseph Ward's Dovonport speech. The latter had also said that Now Zealand would, go up like a cork out of a soda-water bottle if it stopped borrowing. Sir Joseph Ward repudiated tho statement about the cork of a sodawater bottle, and denied' that ho had made tho statement in tho way suggested. T .. Tho Bill was re'dd a third time on the voices, and tho House roso at 1.50 a.m.