JUGGLING THE DAIRY ACCOUNT?

Hawke's Bay Herald-Tribune, Issue 27, 16 February 1937, Page 4

JUGGLING THE DAIRY ACCOUNT?

While, as stated above, both the Minister of Finance and the Prime Minister now acting as his deputy have, so far as the New Zealand public axe concerned, -kept a severely tight mouth about the Government's dairy overdraft account with the Reserve Bank, it would seexn as if someone had babbled about it to the 6tranger within our gates. It may be recalled that a few months back we had a vdsit from a Mr. John Morgan, representing the "Daily Herald,' ' the British Labour Party's ohief press organ. He was fully accredited to our Government and apparently has been let into some of the secrets that are withheld froni those most closely concerned. In any event he has, with all apparent authority, since written articles for his paper on what he learned in New Zealand. In one of these he s'ays that the accommodation being granted to the Government by the Reserve Bank. the Government's own bank, is , being advanced on an interest basis of "somewhere about 1J per cent." This, of course, reads rather strangely when we quite recently had that same Government, for other purposes, borrowing from the public at 3 and 3J per cent, — the same rates, by the way, paid to the publie when they lend their money to the Governmnet by depositing it "at call" in the Post Qffice Savings Bank. Thus, assuming the London journalist to be rightly informed, it would seem that the Government itself places npon the money raised on the "national credit" a value something very substantially less than one-half that of money borrowed. from the publio — and probably it is quite right in so doing. The object in view seems, of course, pretty clear^ As the British market for New Zealand butter is going at present— we all hope it may improve— the Government stands to suffer a fairly serious loss on its huge speculation — at the taxpayers' risk— in the country 's dairy produce. Still, the lower the rate of interest debited against the venture in the overdraft account the sm'aller will the loss be made to appear, In ways like this it is, of course, quite easy to put the best face on failure, if only orie has the ' 'complete control" our Ministers have secured for themselves and no outsider is admitted behind the scenes. »