PUBLIC BORROWING

Evening Post, Volume CXIII, Issue 29, 4 February 1932, Page 13

PUBLIC BORROWING

FARMERS PROTEST

APPLYING TriE BRAKE

THE NEW ZEALAND MARKET

Public borrowing was condemned at a meeting of the Dominion Executive of the New Zealand Farmers' Union today. ■ :' ■ .."

The following remit from Otago was

considered:—

'^This executive is of opinion that any further borrowing ..by tho Government overseas woul.l be reckless and, oven dishonest. Local borrowing should be restricted to cover public works to which the country is already committed, ,bu,t no such works should be continued except those, tliat will become interest-earning within aJ short time after completion." ['■■'■'. ' ..... ■

;, Mr. W.; J.-Poison 'M.P.. (the president) said he was glad to see that we were awakening to the fact that 6ver : seas borrowing had created, :a fool's paradise in which we were, living.. He thought the proposal was very sound.

Mr.- C. 8., Sheat (Otago) said that the withdrawal of the remit had been contemplated because overseas borrowing had-been forcibly stopped. !'::' ..'.:.'

i Mr. Poison: "But;it-wiU go on-when the: opportunity exists." '• '.-.'■ ■

As soon as anybody was willing' to lend, said Mr. W. Morrison (Wanganui), borrowing would be resumed. .

Mr. Poison pointed out th,at the Government had to borrow to complete public works which it would bo uneconomic to abandon. If money was to be raised to complete the works, then it should be raised within New.Zealand. " ' ;

"If you do that/ said Mr..B.S..9hadwick' (I)annevirke)ji "it will keep inter; est up."> '■':■;■.:'.■;.:■•■■■ '•' ".;■' '■■-•.■.'•-...■,• ::"'; ;,; : ,

.Mr. Poison said that,borrowing overseas was responsible .for all our difficulties. ' Wo- had been borrowing to maintain an Wen keel. ' ::; ;

Mr. B. - X Talbot (Hastings) ' said it was time wo recognised that borrowing had'landed us into our: troubles. . '":'• Mr. H.- Seifert (Palmerston North) said that - the practice of borrowing money at 6' per cent, f or' it to ,:earh 3 ! per; cent.- was destruction 'of capital. Everything was being passed on to ;the 'Government,' and- everything done' ■by i the GoTerJtoient-was;dohe in an e'ktrava- ! gant rwayi-: Industry {arid, thrif£'should be considered. -

, Mr.: .W.; B :/ Mathesori ?: (Wellington) questioned the word; in the remit;" ■-: .•■• ,■.■:•■'' :., '.■.•;.. ;■: ■~: '..;■!

I .Mr. Pplson:;.." I think- it's -eom'mer cial. dishonesty ;f J. ' ? ■'.-,' ,: ■

Mr. "K. W.^ ' Dalr'ymple. (Bulls): ""What are'you going to do about money?,',' ;_.; '-.-"-v ,';' ■■■^•■:"r-'.

SUPPLY m NEW ZEALAND,

Mr. Chadwick: '.'This means that,all moneys will have to be supplied in New Zealand,' and it will absorb all the'surplus' money we have. We talk about high rates of interest; why are they high?'' We have agreed it's supply arid demand. .Don't. you, : think'" we ' are going to makejit dearer?" [Theinvestor, he ..saidj; thought the Government offered- tetter • ; security and. lent hi 3 money to the - Government;; a' small surplus was left, and'the rates of in^ terest were high; Money for' nonproductive purposes should not be bbrrowed; V"■'■■.■,•'.:■■"■.•' .-:•■;■:■'•■ ■■, '.:.;■■ ■■•:"■:".

Mr; K. H. \Feisst (Waikato) said it ■was not-.the-borrowing-that : was uneconomic, .but the, spending for nonproduetive'tpurposes. '• Borrowing should bo brought down, to the minimum. The .Government,;, ho weyer, had . been con.tending: that.all.!al6ng.J>ln View-p£ tho present position of the Government he thought that ; tho 'matter^ should > rest. The Government was not-going'to do much borrowing to-day. . ■•;.• ~;.;■

.Mr.. Poison'said he thought" the matter went further. We had had a succession'of, good. .times,: when, to'the casual qbserver, it looked all right to b'orro^y. 'Now. ~.yre realised that we ■were; creating conditions that, wfere not honest "or real—-(hearj hear)—4and were responsible: if or' a great many .of the troubles that had' come upon ; us.. Had to not : had the - burden of overseas, debt; ey&n though -we haia had ~td pay a hjgher: rate of interest :in New, Zear land, >ye should have been in :a: very much stronger and. sounder position now. Railways;and big public works had] had to be abandoned before the depression actually struck us because they could rievor 'pay. Works of all kinds had been undertaken by the .State because of the freedom to: borrow abroad. Borrowing, overseas should be .discouraged or curtailed. It had creajted^a.false position, a sort of pseudoprosperity i which had:resulted in*false standards and had, made it more difficult for" us to get back to an even keel. Had we .been restricted • to a greater extent, to .our own.market, .our intorest ■would have been higher and iwe Would have, spread '.'the- money, more ,wisely. The high,rate of interest would" have .prevented^ great deal of extravagant expenditure; Cheap money! had tempted us to launch into projects which were not sound, and if we had had to face a higher barrier; of ■_ interest we would havo been saved . against:. ourselves in ■many' cases. ..,'." .■,..'.."..-'."' .' . .'..'■ "■''