The Guardian And Evening Star, with which is incorporated the West Coast Times. FRIDAY, AUGUST 29th, 1924. MORE BORROWING.

Hokitika Guardian, 29 August 1924, Page 2

The Guardian And Evening Star, with which is incorporated the West Coast Times. FRIDAY, AUGUST 29th, 1924. MORE BORROWING.

It is reported tlit' Prime Minister is bringing down further borrowing proposals. 1 lie money, according to all aceouiits, is reunited lor State Advances purposes, and is intended to meet in some measure the condition of affairs likelv to arise when the moratorium is lifted. The loans outstanding on nccount of State Advances last March was £l2,(il'2.'lod. This money represents sums advanced on mortgages to settler.- and workers. The repayments of the amount* advanced go to create n sinking fund as ultimate security for the country's debt. But the-e funds are invested very largely in fresh mortgages, so that the sinking

funds add rc-allv to tho capital sum invested. It is manifest that tv lie re a large sum is so invested that in the event of the money being urgently required. it could not Ik? readily redeemed, and serious difficulties in finance are possible. The Controller and Au-ditor-General has called attention to this in his annual report to Parliament, and seeing that the extinguishment of the public debt was proposed by the creation ot the sinking funds. tho latter should ho kept sol liable and ready at call if the country is to have the backing it expected to the State Advances loau money. The report of the Auditor-General suggests that by using the sinking funds for further mortgages, a sum in addition to that borrowed is being loaned out, so that j tho country is doing exceedingly well 1 in {ho flatter St(tt« Advances,

When Mr Massey is bringing forward liis proposals, the j'tisition should be made clear as to what extent the fresh loan money is to meet the new situation its |meted to he created by the lift'ing of the moratorium. If the State i.s to take over mortgages which are at present moribund. . general financial | osition i.s not going to he helped, while the Stale will he taking on burdens which hanks and other institutions are not enamouicii With. This, on top of the burden of increased loan debts, means making the financial | osit.icn more and more difficult, lit regard to borrowing, tho Government, should certainly have a more restrictive [.obey than it has. We notice that Mr .Massey this week has been talking about restricting the borrowing propensities of local bodies. The excess in the latter direction has been caused by the hydro-electric developments and the establishment ot Power Hoards anxious to spread their network of consumers so as to make their

several ] ropodtions more and mote profitable to the respective districts. In such cases, where the districts are being well served with necessary light and power alfcitiiig industrial detclopuient, and at the same time plat ing. the scheme on a payable footing for the future, not much exception to the

Corrouing cun I c maintained successfully. If -Mi Massey would practice w|mt he pleaches in regard to the curtailment of borrowing tlieie would lie greater ronliib'iice in his finance. It is evident the i’rinic Minister is icait to go on the money market whenever lie can. Ibis must, have an ending, and the slimier some more defined and selfreliant policy in ii'gnid to liimmc is brought forward the better for tho future of the Dominion. There is a rush fm money at | resent been use the Government ha- eneouiaged that rush.

and the present auiiouneemcm of further ho: row ing will assist, to increase the clamour for more money. .Mr Massey’s method i.s to borrow and borrow. and the burden is being shouldered on to the people who pay the taxation of the countiy. The manipula-

tion of the country's finance sime the Dominion was loolish enough to part with the .servin'- of Sir Joseph Ward suggests there will he no real policy of relief till a radical change in the administration i-l the national finance is brought ahum.