The Guardian And Evening Star, with which is incorporated the West Coast Times. THURSDAY, AUGUST 21st, 1924. SCATTERING THE CASH.

Hokitika Guardian, 21 August 1924, Page 2

The Guardian And Evening Star, with which is incorporated the West Coast Times. THURSDAY, AUGUST 21st, 1924. SCATTERING THE CASH.

'l'm; particular virtue of the I-abor policy propounded by Mr Holland to ease up the lilting of tho moratorium would be the scattering of the cash involved, always providing thut the

Government could manage to raise six millions a year to take over the. farmers’ mortgages. The raisins of the money would lie the rub, and it is just a.s well that it is so, otherwise the country would bo landed with an enormous burden of debt in a very short time. Since war time, countries have come to think in millions when

linaiiee is involved, and the Labor party here | romises to he as rash as the Reform Government itself, which is going on the money market as olton as it limy. The propensities for borrowing are a matter for serious concern, especially when it is home in mimi that the amount of loans outstanding on 31st, March last was the enormous sum of £221,01(5,301. 'lbis great sum was made up of a public debt of £208.973,9(51, and a State Advances debt of £12.042.400. As showing how tin- finances ol the Dominion we.e juggled "ith last year, there is an interesting |aragraph in the annual report of the Controller and AuditorGeneral as follow.s: "I’ublic-debt loans to the amount of C 1.283,980 were converted and replaced. £0,180,005 were renewed, and £7.008,920 were redeemed, in each ease by the issue ol new securities of an <-c|iial face value. Loans of the State advances debt amounting to £217.900 were renewed, and C 572.100 were redeemed, by llie issue of an ei|ii:il amount of new securities. Treasury bills to the amount, of £2.2.j0,000 were issued against revenue. and were paid off during tho year." These figures show that it is necessary for the .Minister of Finance to In- busy at times providing ways and uican.s to meet engagements. The

process i.s a simple one; cithe: more money is raised to pay off debts coming due. and so perpetuating the debt, or anticipating revenue by Treasury hills wtiicli liavo to he made *.'ood from subsequent income. AVitli the linamos in this condition Labor's proposal to go on borrowing money, the interest and sinking fund for which will be tin extra burden on the taxpayer, is not a sound proposition at all. The State lending department has served a useful purpose in nianv respects, lint reference to the report of the \iidil< - General shows again that tile financial side of the business is falling ultimately on the taxpayer. For instance, two outstanding weaknesses exist in providing iol' the redemption of the debt. Finals are invested in mortgages to assist the Sinking Fund account, and it is pointed out serious dillienlty would arise should it he;ome necessary to realise a large amount of the investments at any time. In the ease of the local authorities branch no profits have been made since the inception of the Act in 1909, while in the i ase of workers’ advances the piolits are insufficient to establish a reserve fund ! The repayment of the loan money will fall therefore, on the Consolidated Fund. If the proposal by Air Holland is to take olfect. there might he a further addition to the taxpayers’ burden, particularly as the idea of the Leader of the Labor party i.s to take tip 95 per cent of the value of tiu* proeprty in State mortgage. AA’ith land values .so liable to fluctuation, tho margin is far too small for safe investment, and it is apparent the country would lie setting out on another scatter cash orgie for the purpose of piling up more public debt for tile taxpayer to shoulder. The proposal by Labor is far too extreme to have serious consideration bv Parliament.