END OF FINANCIAL DEBATE

Gisborne Times, Volume XXVI, Issue 2252, 25 July 1908, Page 2

END OF FINANCIAL DEBATE

THE PREMIER REPLIES TO CRITICS. ATTEMPTS TO RAISE THE RATE OF INTEREST. [Special to “Times.”] AVELLINGON. July 24. The debate on tho Budget, which has been, on the, whole, of a very dreary and uninteresting nature, was brought to a close this alteration witli a vigorous speech by the Prime Minister in defence of his financial administration proposals. The main points of his speecli dealt with the borrowing proposals of the Government; the alleged attempt in certain quarters to decry the financial position of tho country, and the action of certain- financial institutions in New Zealand in taking advantage oi the recent' stringency-in the money market to raise the rate of interest paid, by their clients He informed lion, members that the financial position ol the country was even stronger than was generally supposed. He also reiterated his statement that the Government was quite justified in claiming a profit of £56,000 between the face value and what was paid for i the reserve, securities. ,He added that there had already been two transactions by which £2IOO and £IOOO profit had been made. In regard to borrowing in New Zealand, he quoted figures to show that the Government had obtained only a comparatively small' amount locally. He denied a, statement by the ol the, Opposition that tho recent New South AVales loan had been a success on the London market. "Under lo per cent of the sleek had been taken up; and the underwriters had to take the balance, notwithstanding the fact that the loan was placed on the market at 98£. The loan, he caid, was “a huge, absolute” failure upon the . London market. 11l regard to the balance of ways and means at the end of the year, he maintained that he w r as justified in maintaining a strong position with £230,000 between ways and means and expenditure. Regarding the attempts that were being made to decry the financial position ill London, he quoted from the “London Finance Journal” a letter by John Dutliie copied from the “Dominion,” in which a statement about borrowing to tho extent of £4,000,000 was made the occasion for ail attack oil New Zealand finance. Dealing with the statements made in Mr. Duthie’s letter, the journal had stated that what was wanted was the'-creation of a healthy public opinion, both in New- Zealand and m London, that would force the Administration to slow down and cease living upon loans, thus giving a fine country a chance to grow up into a .nation. The Leader of the Opposition said Sir Joseph had, in one of his speeches ,expressed the hope that if the Government did not put the brake on in regard to their borrowing he hoped the money-lenders would do it. He did not think Air. Massey realised the weight of that utterance. He was really inviting the money-lenders, of the Old AVorld to set the wishes of the people here at defiance in connection with their financial proposals, yet the Opposition did not oppose the loan proposals of the Government in Parliament, but, on the contrary, made large demands for expenditure. Yet, on the very night that Air. Alassey spoke, investors in Queensland had sent over here offering to take debentures at par aiul at 2' per cent, premium. Furthermore, - during the past w r eek, while the debate was going on, he, as Treasurer, refused from Australia £380,000 for investment in this coun try, because the debentures were wanted below par. He said he had letters ill his possession that showed there were people in this country who were now, and had been for some years, and always Were, ready to invest in New- Zealand stocks in London if the stock went down low enough for them. He could not, liowever, quote these letters without committing a. breach of confidence, and that he would never be guilty of. He did not blame people who did their best to secure investments when a good opportunity, occurred, but as Finance Alinister lie must resist attempts to lower New Zealand stocks when loans were going on the market. There was no finer security in tho world than was offered by NewZealand for the money she borrowed. Ho had been charged with being optimistic, but it could not be shown that ho had ever under-estimated 'the position. Referring to the increase m the rate of iuterest to the private borrower owing to the tightness of the money market, tho Premier said lie had in his possession five or six circulars sent out in January of this year from financial institutions to their clients, asking the latter to let them know if they would agree to an extension of their loans falling due for a period of three, to five years at a much increased rate of interest. He did not wish to give the names away of these institutions, but he had their names. They did not send out those circulars because they were in want of funds, but because they wanted a much higher rate of interest. Unless their clients renewed on the terms proposed, they threatened to consider tne question of the immediate repayment iof the advances. Ho mentioned the case of a woman at the Hutt, from whom 7J, per cent was demanded. However, though the amount was rather more than the Advances to Settlers Department could grant, the Department came to her assistance up to a certain amount, and the officer and some friends got the balance of £SO amongst themselves', and the woman ivas saved. (Applause.) He quoted, in support of his opinion as expressed ill tlio Budget, a letter from Air. Geo. Booth, of Booth and MacDonald, Christchurch, conveying his appreciation of tho * Financial Statement, which was just the sort of Statement that was wanted to silence calamityhow'leijs: The 'writer addfed that there was no need to worry about tho future so long as the mines of the world were putting out gold in increasing quantities. Tho reading of the letter was received with applause. Sir Joseph AA 7 ard went on to state that the Christchurch “Press” had also condemned the croakers, yet, in the face of such statements as those, tho cry-was;: being put forth to the effect that New Zealand was going to borrow further millions, and objection to this position was'made in the London press. On resuming "his seat, the Premier was loudly applauded.