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Hokitika Guardian, 7 October 1925, Page 2

Tm.; decision of tic Government lo laise a loan of five millions in New Zealand, is to be i-oninielided as an exhibition of srlf-rcliam o. The amount, however, is large, and to make the investment atirartivc. tlio inter.’-! i- high 5.1 per cent. This ian attractive investment for the people. and it is satisfactory at least that the loan will bo raised locally, v ft 1 1 the benefit ill interest payments for the leal public. The loan could be rai-cd at a lower rate at Home, no doubt, but there would be a discount, and high Hotation charges, si that in the iml it might he more remunerative to tiiid 1 he money in our own territory. Besides, ii -coins ipicst ionable whether the amount involved could be raised at Home just now satisfactorily. The lasi loan is still in the hands of the underwriters, and unless Hie new loan could lie underwritten on fair terms it would he suicidal to go on the Bouden market, liaising the money in New Zealand w ill help the credit- of the Dominion abroad, and the venture of the (lovernment is to he commended. even though the principal sum involved is high. AVe should like to see a tapering off of the borrowing, policy. It is realised, of course, with the volume of public works now proceeding, and the desirability of carrying railways. roads and hydro-electric works to. the most profitable point for returns, that borrowing is necessary if the works are to go on at a reasonable rate. At the same time we think the tinancial policy of the country more than anything else should ho the subject for close review by a hoard or body of experts, the duty of which would b« to see that the best results were arrived at for the least money necessary to raise. Unless there is some process of tapering off the load of debt and the weight, of the interest charges will he a burden imposing increasing rather than diminishing taxation. W here the works are not proving reproductive the Government is borrowing money to pay interest on loans, and that line of action leads to a financial crisis. Taking the trend of tilings in New Zealand as they are. it seems imperative that borrowing should be contracting rather than expanding, and that, instead of increasing the public debt by leaps and hounds, (he policy of the country should he directed towards steadily reducing the national debt