Government Borrowing

Gisborne Herald, Volume LXVI, Issue 19987, 12 July 1939, Page 16

Government Borrowing

Sir. —“Labour” answers my letter by producing >a number of haticruths, perhaps due to the misunderstanding by tiie leaders of his party •of certain items of finance. He says, for example, that Nationalist speakers had stated that the Coalition had accumulated £40,000,000 in London. Labour speakers have made the same statement, and when the Lee letter mentioned £24,000,000 the reference was to the state of the accounts at a later date. He mentions that £10,000,000 is the amount quoted for a defence loan. The only figure quoted for defence is £6,000,000; the extra 110,000,000 is said to be Mr. Nash’s idea of the additional money which New Zealand wants. Of course no official statement has ever been made that Mr. Nash wants to borrow any new money at all, and if Mr. Nash cannot, or will not, toll us what he proposes, “Labour’s” mistake may be excuseable. But “Labour” is certainly in orroi in saying that the necessity for defence expenditure is something which was wholly unforeseen. England has certainly been rearming steadily for tiie past three years—and during much of that time the Opposition has been pointing out the necessity for New Zealand following suit. They have pointed out that before social security comes national security, and there seems no reason why New Zealand should not stand ea its own feet instead of having to rush to England l for a loan with w hich .to .put its defences in order. The present Government is the lirst which has not given a frank statement of its borrowings.- Hitherto loans have been 1 announced of such and such an amount, and have been subscribed partly in New Zealand, and partly in London. Until the present year this Government has borrowed from such sources as the Post Olliee and other Government departments, and has not disclosed to the public tiie amount of its borrowings, ft makes no difference whether the loans are raised w holly in New Zen land, or, as in. former times,, partly in New Zealand and partly in London. All the money lias to, be repaid, and when part is borrowed in Lon don, London funds are increased, anthat no doubt is \yhy Mr. Nash now wants to borrow the .extra money in London. One effect of borrowing ir New Zealand has been to decrease the London funds; one effect of borrowing in London would be to increase them, and 1 as Mr. Nash is breaking his neck to get such a loan it is not difficult to see that the Government's policy of borrowing wbon.