THE BORROWING POLICY.

Hokitika Guardian, 23 June 1920, Page 4

THE BORROWING POLICY.

Um*. (Mercantile Gazette)

So far as wo can see, Mr Massey will require a goldmine at his command from which to draw supplies; from every point sturdy suppliants are framing, demands upon tho public purse, tho employees of the Government are making demands for millions; the military party apparently mean to annex a large portion of tho country’s income, railways and public works must he carried on, and, let us hope, completed, while administration charges are soaring. We had 100,0(10 men in the field during tho war and the country accepted the expense of keeping them there without a murmur, but it looks now a g if oar expenditure will be none the less in peace than it was iti war. In Britain the Chancellor is paying off debts and the sacrifice the people there are making is producing beneficial results, as indebtedness is being substantially reduced; here the converse is taking place—taxation is almost .the heaviest in the world arid our liabilities arc increasing,, : What is wanted i g . that expenditure shall he decreased in every department, that the Government should at once free trade and commerce 'from all restrictions and permit the business of the. country to be handled by those who understand it, and that the Government should confine itself to those matters only which properly fail within the ambit of its functions.

With regard to the loan of £2,000,000, that must be found by the.wealthy classes and by trading companies, the rank and file will contribute but a very small percentage. But, unfortunately for the wealthier class, the loan presents nothing attractive. Take, for instance, any of the large institutionsthe hanks, Public Trust Office, Government Life Insurance Department, and the big mercantile concerns the pastoralist or farmer; these are all paying 37 per cent, of their income to the Tax Commissioner already, and Mr Massey s 5 per cent, loan to them will return £3 4s 9d. only per cent. Thi s is not an investment for which any business man will find money except under compulsion and we think better should have been offered. Sir Joseph Ward knew more about finance than does any member of the present Government, and he displayed great judgment when he kept the interest rate to 4}- per cent, free of income tax. He was strong enough to ignore the protests of those who have nothing to lend, and by doing so got thy. money he required without raising the rate of interest all round. Mr Massey has almost insuperable difficulties to content against, clamant demands for increased expenditure, and a limited revenue. For the present position Mr Massey is no more to blame than we are, hut it will'require a brilliant financier to so adjust taxation and the finance of the Dominion th.lt business men will not have all enterprise knocked out of them and prefer to pull put rather than continue in business. We should suggest that the first thing required is a drastic cutting-down of all unnecessary expenditure; if that were done people would more willingly subscribe to any loan; as it is, most people think that moneys lent to the Government will he frittered away in useless qnd unnecessary expenditure.