WELLINGTON TOPICS

Hokitika Guardian, 16 January 1929, Page 3

WELLINGTON TOPICS

THE SEVEN MILLION LOAN. SATISFACTORY FLOTATION. (Special to “ Guardian ”.) WELLINGTON, January 14. The Prime Minister has reason to he well, pleased by the London money market’s ready response to bis seven million loan. Happily the credit of the Dominion stood high with financiers and investors and there was never a doubt that the full amount asked for would be subscribed and over-subscribed. There had been attempts in some quarters during the election campaign, however, to create an impression that the credit of New Zealand depended largely upon the political party that happened to he in office for the time being and that Reform would be more acceptable to investors than either the United Party or tlie Labour Party. But the present loan of seven millions, negotiated by the United Government, is costing the country £4 16s Id by way of interest, while the five million loan negotiated by tlie Reform Government in May last cost £4 19s Bd. Sir Joseph Ward at least may take credit for having dono as well as liis predecessor at the Treasury and to have done it without drawing any invidious comparisons. ... INFORMATION REQUIRED.

Tlie “Evening Post,” while congratulating Sir Joseph upon the success of his first appeal to the London market since his return to the Treasury, suggests that further information in regard to the financial side of his policy might now he submitted to a friendly public. “The position would be better understood by all concerned,” it says, “ i'f tlie Prime Minister would supplement tlie statement already issued by an explanation of the attitude of London towards State Advances loans, an estimate of the loan capital required for land settlement and public: works apart from the main railway line*;, and a calculation of the borrowing required to complete the whole programme. The majority of tlie people of New Zealand are, we believe, sincerely anxious to help Sir Joseph Ward in the operation of a progressive but cautious policy, and they will be glad to have the information which will assure them of the progress and caution of the Government.” Here is an invitation to take the public into his confidence which Sir Joseph can scarcely ignore. Tt is his opportunity. PLAYING FOR SAFETY.

The “Dominion,” recovering its dignity, accepts the inevitable with a good grace. “ Probably,” it says, “it is a wise precaution to arrange for the extra two millions of loan conversion. The tendency of the money market lias lieen towards cheaper credit; hut with the hoavv conversion operations in prospect Sir Joseph Ward has decided to 1 play safe.’ As to the fresh borrowing. that is the £7,000,000, this apparently is for railways, hydro-elec-tric and public works undertakings generally. It is not quite clear from the published statement, hut the provision for advances to settlers and workers appears to have been arranged locally. The terms of the new loan are slightly better than those of last year, but the interest to he paid will not permit of advances to settlers and workers at 4-J per cent unless the State is prepared to face a loss on the advances made.” Sir Joseph’s critics may make their minds easy on this point. The rate of interest may he reduced, but it will not be at the cost of the public. RAILWAY CONSTRUCTION.

Probably the chief bone of conten tion in the repast Sir Joseph Ward has spread before the public will be bis railway construction policy. “1 have decided,” be announced the other day, “ to increase the loan from £5,000,000 to £7,000,000 for public works, including railway construction and improvements and hydro-electric schemes. In these days an increase of two millions to the public works expenditure is not a very alarming appropriation, but many well informed practical people have come to regard the multiplication of railways as an uneconomic proceeding. While the construction schemes of fifty odd years have been dragging their costly way. more 01 less slowly, towards completion, other means of transport have been evolved, and to-day it is a moot question whether rails and steam or roads and petrol serve the lietter the need of the present generation. Already the “unpaying lines ” are costing the taxpayers half a million a year and the new Government should examine the position closely before adding to this drain upon the resources of the community.