Hokitika Guardian & Evening Star SATURDAY, DECEMBER 6th., 1919. THE WEEK.

Hokitika Guardian, 6 December 1919, Page 2

Hokitika Guardian & Evening Star SATURDAY, DECEMBER 6th., 1919. THE WEEK.

The British Government has resolved , to abandon the scheme of the Chau- | cellor of the Exchequer with regard i to the issue of' premium bonds. This | kind of ‘high finance” was approved j of lately by Mr Chamberlain, but tiie question has been 'seriously considered since then by those controlling financial institutions, notably those catering for the thrifty. It was felt that the opportunity to indulge the gambling spirit by trafficking in premium bonds would result in large sums being withdrawn from Savings Banks and war loans for the purpose of investing with the prospects of premium of prizes. A large amount of the hoarded money in savings banks is invested in Government securities, and the country is having the benefit and use of this money already. If taken from one bank to be pub into the premium bonds, it would be a mere transfer dislocating credits and not adding any fresh money for the State. On grounds of expediency therefore Tather than ethical, the Government authorities have abandoned the premium bond proposals, and the Commons endorsed this by 276 to 84. This is decisive and suggests at once that the monetary outlook for all countries is not going to bo improved by experimental means. Only solid business done can help to retrieve the heavy financial responsibilities and this calls for more and more production. The root of all the trouble about the cost of living is the shortage of supplies in the world, and till the national larders are filled with goods there can be no appreciable nor permanent reduction in the price of every day commodities. This applies to all countries alike, and New Zealand js not any exception.

Fortunate though the position of New Zealand is in so many .respects, the financial burden on the country now is very serious. The net debt of the Dominion is over one hundred and seventy millions, equal to about £lsl per head of the population. When it was hovering about £6O per head in the mid-years of the Seddon -regime, the financial critics used to be telling ns from every political platform that the country was “galloping to a deficit.” Yet the debt is mounting up still. It has nearly doubled itself during the duration of the war and this not withstanding our vast export trade,,, and the general affluence of the country. When 'thia country settles down lafter the elections the directing party will have to tackle the financial situation without delay. On the eve of the election the Government ha s /been prolific in promises and generous in distribution of votes and grants for all descriptions o f expenditure. Mr Massey has admitted that more expenditure has b6en granted or authorised than can be spent in the next three years. This scatter-cash administration will cease when polling day has passed, for the authorities must settle down soberly to the stringency of the situation. The yoke of responsibility will bear heavy, and the debts loom inti ahead to be met must be provided for. Money is going to he dearer, and il the English money market is opened there will be such a rush from the colonies that there will not bo enough money to go round and such loans as are floated can he only dear loans. New Zealand’s credit stands well, but Mr Massey has “collared” Sir Joseph Ward’s nest-egg surplus which was to have been the real guarantee behind a Dominion appeal for a London loan.

On the flnancia] outlook of this country, a recent issue of the Mercantile Gazette pointed out that the expansion of the debt and the probable consequences that will follow therefrom are of very great moment. During the last session the Government obtained authority to borrow about £31,000,000, but not all of this will be required this year. The Government must borrow for capital expenditure, and it appears from what has recently taken place that there will be considerable difficulty. The Victory Loan of £10,000,000 that was placed on the New Zealand market a few months ago was not a success notwithstanding the power of compulsion. The Government cannot expect to continue to exercise compulsion in respect to future loans. What then ? Will the Government obtain further large sums from the public of New Zealand on the basis of 4f per cent interest? We think not. Even if the Government offered per cent subject to income tax it woiuld not get much money. It may succeed to some extent if investors were offered 6 per cent., bub in that case there would be a general rise in. the interest rate. It may be said that the Government can borrow in London. So it can, but will it do any better there in respect to interest. New South Wales, a few weeks ago offered a throe million loan on the London market, and although the interest was a high as s}i per cent., and the stock was issued as £9B, the underwriters had to find 64 per cent of the issue. The British Government is paying 51 per cent on Treasury Bills at 6 and 12 months, and that being so, it is hardly likely that New Zealand will bo able to borrow at under 6 per cent. The fact of the matter is that the available credits are required for finJanding industries and manufactures, and that appears to be the situation. Tho New Zealand Government, like tlie other Governments in Australasia, will have considerable difficulty in borrowng even at high rates of interest and that in itself must pub a check on expenditure. Instead of candidates proposing Increased expenditure they should advocate thrift and economy, hard work and increased production. It is obvious from the present outlook that there is no possibility of taxation being reduced, and the taxation to-day is equal to £l2 7s Bd. per head of the | European population as compared with £5 10a. in 1914. i The National Anthem echoed through tho town all day Tuesday. It was tho 1 ' '

striking note at that fine gathering to grdet the Governor-General. It was i heard again at the military parade, when the war decorations were present- - ed. Finally it closed the day appro- ] priately at the tail-end of the political j Labour meeting,-when a band of returned soldiers/ led the assemblage in the familiar strains. This was a pleasing and proper change from the singing of “The Red Flag”, a revolutionary song, which usually marks the Labour gatherings controlled by the Extremists. Here . the loyalists took charge and they car- ' [ ried througli their loyal outburst in i good voice. The town appears to have | enjoyed this unrehearsed conclusion to j the local Labor meeting, and those rej sponsible are to be congratulated on their action. Writing of Tuesday’s proI eeedings reminds us that the happen--1 ings of the day showed in unmistakc- | able manner that tli'c people of Hoki- | tika are loyal and thorough in their vespect the authority and maintenance of that constitutional procedure which will ensure true freedom and national stability. More than one citizen remarked on Tuesday in effect that “the old town was heart-whole, loyal and true to its best traditions.” -It is good to find it so, and to see firmly fixed in ' the breasts of the people the right kind of peace-loving spirits which will secure peace and good will among rli. Tin National -Anthem cannot be sung too often those times to remind us of the fountain head whence is derived those constitutional privileges which maintained, give security and freedom to the people. i

The morning papier at Greymouth having blossomed into the mouth-piece of the Labor party as that organisation figures on the West Coast, has been giving its readers a forecast of the Westland Election result. The paper lets its fancy run away with it, and it discloses a position of assured success for the Labour candidate as it would wish it to he—not as it is. If the Labor paper’s forecast were correct Sir O’Brien and his friends need not worry further in Westland, but might cross over to Buller and help Mr Holland who is drifting on to a leeshore under the pounding he is receiving from the other Mr O’Brien —the wearer otf the soldier’s badge. According to the Argus, Mr O’Brien is going to sweep the Westland poll all down the line, but this little bit of bombast does not fit in with the record of his meetings/, many of which appear to have been records in the way of minimums. Perhaps the Argus writer, new to election procedure, will be wiser after the event. It is never wise to prophecy till you know. In this instance it is safer to take an independent stand on a higher attitude and looking down on the contest just judge for yourself how the mass of the people will vote. There is a very simple test to put: “What is the trend of public feeling regarding the man who served his country in the trenches during the time of National crisis?” Answer that, and you have thj» result of both the Westland and Buller contests in particular, for both soldier candidates are opposed hv men who sought by every public means to prevent the soldier going, and when he went, being backed up with adequate reinforcements.