The Guardian And Evening Star, with which is incorporated the West Coast Times. MONDAY, SEPTEMBER 22nd, 1024. NATIONAL CREDIT.

Hokitika Guardian, 22 September 1924, Page 2

The Guardian And Evening Star, with which is incorporated the West Coast Times. MONDAY, SEPTEMBER 22nd, 1024. NATIONAL CREDIT.

The fac-t that the Government is borrowing so frequently of late suggests that the national credit stands high. But the- credit, will he drained very

soon if the set policy of the (tovenimenL is t oiitinned. It is li.ss than two weeks ago when the Prime Minister annonnied a icdurlinri in taxation of .CDtIO.rtOO. Tii is was a.s near as .Mi Massey eared to go to tlu* promised million reduction. However the announcement was a 1 lea-ant one to make and there win, a sigh of relict from those i|tiarters likely to derive some individual benefit. But any Icelings of satisfaction were short lived, lor within a lew days the Prime .Minister amiotineeil a :s|erial loan of £1,125.0C!> raised in the Dominion front the Bank of New Zealand. The situation then looked like a. gilt to Peter for which Paul had to pay! It all seems very queer linaiv.e to do a kindly n< tion with tin* right hand, and undo it immediately with the left hand. The Bald; loan is so nriaugcil as to assist the institution with its capital, and to perform this benign act, the (iovcrumeiit is t:» contribute £>‘l7"i.o‘)9 of the £l.l2'i.i)lltl. That looks like more juggling of ligtirts. In return the (iovernmei.t w ill possess BTo.ilOO £1 shares and those on the maria t have a value of £.') according to latest sales. 'lh.> loan IT cm the Bank is at the rale of which is very gni d .Ln.-Tn-.s lof the instiiution seeing that si much new capital becomes so lightly interest hearing from the moment it is available. I.ikcw: a the transaction has been helpful to the value of all the shares in the Bald;, and according to one <alt illation .shares had jumped in sale value in one night ihy Hi',"... The position therefore lias interesting phases for ennlcmphitinii outside the indoLlness if the country which was the main stibje: t in mind in regard to national credit. The total :'old of the inmitry most now ha iinniiit ing up to C/£’().()!Kl.OO'l, and the end is out

yet. Mr Ma .cv is said to bo preparing to "o on the l.omloii iiiail-el again in a lew months’ time for live or six iniMinus. One wonders where the burrowing poli.y of the Govcinmeiit is to end, and wliat soil of a bmdon they are going to put on the people. 'I heir sni-i essois alter the general election next year will Imve a load of debt to discharge or otherwise manipulate to keep the financial credit sound —for this continuous borrowing without proper provision for re] :ivuicots most have ail en:l. The interest hill alone now runs into many millions. without pencilling for the reduction of the debt. It would appear that the country is now borrowing to pay its interest on other borrowed money, which is the start of a vicious i irele to seriously nffei t the national credit. I’arliamcnt has been wading through the Estimates of late, and it is regretable that there are no serious proposals to eenouiise in regard to the administration. The trend of the policy of the Government suggests that it is more important to reduce administrative at.d general expenditure than to reduce taxation. Every penny of the latter seems to lie necessary to avoid harrowing to provide money for interest on loans. The finances of the country stand in need of a i lo.se overhaul, and that will he imperatively necessary in the near future if the national credit is to be maintained. There is probably not a more pressing matter for attention at this juncture, but while the Government can borrow with readiness any thought of readjustment, not to say retrenchment, is quite out of the question.