N.Z. FINANCE

Hokitika Guardian, 25 July 1929, Page 2

N.Z. FINANCE

SIR J. G. WARD’S SPEECH DRAMATIC INCIDENT. REFORM GOVERNMENT’S LEGACY.

WELLINGTON, July 23,

There was a dramatic moment in Sir Joseph Ward’s speech in the House to-night, when he said that on taking office he found his loan policy hampered by an undertaking of the former Finance Minister that New Zealand wou|d; not go on the London money market ■ tfor A prompt denial was . heard from Mr Downie Stewart, but Sir Joseph persisted, declaring that he had the evidence. The Prime Minister’s speech opened with humorous inferences to the similarity of speeches, which left him wondering whether they had a meeting to fix their policy. He was particularly struck with the criticism of the absence of the seventy millions. .. Mr A. Hamilton: That’s coming. (Laughter.) bir Joseph Ward: With wonderful unanimity they have paraded the seventy millions. Mr Samuel: You cannot parade what you haven’t got. Sir Jo&oph Ward:; The innocent has put his foot into 'it immediately. We have it. (Laughter and ‘.‘hear, hear. Tho Prime- Minister went on to say that he would some, information about the seventy! milOpnfe’'fey way of comparison! jyfrthj; Vhatj | 'the previous Governmentf Ihactpdpneijfor State Advances and Public Works. For the six months January 1 to June 30, the comparative expenditure on Public Works was: Six months, 1929, £4,358,645; six months, 1928, £4,032,670. This showed an increase of expenditure by the present Government df £326,088.

• MILLIONS FOR ADVANCES. When the former Government left office it left ifcfe£450,000 in b£ loans applied forj over three; years, running j|ntoMasout three mil-, lions. On found applications from ['W&’kH era for £4,168,200 V| December 10, when he took office, till July 15, 1920, the department had adfvanced to 1927 settlers £2,234,520 and to 2604 total advaiiceb) }pf j I which amounts paid over were £3,055,742. Colonel M’Donald: A great record, ■itfr 'Parry': What did 'Uio previous Government advance. Sir Josoph Ward replied that he did not have the figures. The department, he continued, now had £1,979,910 in investment funds. The Government had provided for rural advances over a million sterling and these figures, he suggested, clearly proved that the had: -fulfilled'; its[ election IBS A LONDON PROHIBITION. £&*?; . StrfEhe Prime Minister said ho was dispnqined to refer to his, predecessor in jiffme, but he was l .^^jj^t«?" :^ngDt|pn ' that hon genfiemahjjhad' Negotiation for rene#ah»6f-'a- loan .and: had agreed not to go on the London money market for two years. Members: Whew I ■ :> Sir Joseph Ward: And when I came into office tha£ was the first thing I learned.

\ Mr Downie Stewart: The first.time I have -known of it. The hon. gentle•man is under a misapprehension. Sir Joseph Ward: Pardon me, I am •uqder no misapprehension, because I to carry it out. ’ j .

[Mr Coates, Leader of the Opposition: [No-such arrangement was made. [ft [Sir Joseph Ward: ,T carried out the conditions that had gone to London •before I took office, as to our keeping -pff/the London market for two years. I -&ive my word that is the position. .-, 1 -Mr Coates: It cannot be accepted, because nq such arrangement was made.

Sir Joseph Ward: And I cannot acicept that. You don’t suggest that I iwould make such a. statement unless 3 could prove it? As a matter of fact dt altered the whole course I was purfcuirig at the time in connection with the adjustment of finances, and that was the reason I could not give to the House when T was being criticised by lion, gentlemen opposite. I could not give it out for fear of injuring the prospects of a loan which I had to float. I floated a loan for seven “millions, and arranged at the same time for conversions in connection with twenty-nine millions, of which about live millions was in course of conversion. When I took office I was prohibited from going on the London market, and had the alternative of subscribing to what had been done before I took office or embarking on fresh undertakings altogether and outside what the hon gentleman had done. I came to the conclusion, and wisely so, that 1 would keep off the London market for advances to settlers and workers. I am keeping off and intend to do so in the meantime.

Sir Joseph said that he made up his mind to obtain the money in New Zealand, and did so. That was his answer lo those who asked why he had not carried 'out the promise to lend at 4J per cent. It was not possible to do so; .ur Samuel: Nobody ever thought it wqs. Sir Joseph Ward: I know you never

thought anything. (Laughter.) We have the seven million loan intact, invested temporarily in London until we require to call upon it to maintain our public expenditure in this.country. Sir Joseph said he wondered if members opposite would realise that the expenditure -for advances and for public works he had quoted represented the full proportion of the seventy million loan lie had promised to expend, though he was obliged to keep off the London market for two years. Mr Downie Stewart: You do . not suggest I obliged you ? Sir Joseph Ward: Yes, through some negotiations of yours. UNDERTAKING DENIED. Mr W. Downie Stewart, • Finance Minister in the Coates Administration, followed the Prime Minister, and declared that he was completely puzzled by his reference to a two years’ prohibition from borrowing in London, ft was known that at the end of 1929 there were loans for twenty-nine millions falling due, and he considered it highly desirable while he was in office to anticipate some of these renewals, so that the ijnal conversion would not be unduly high. Therefore, when he went on the London market he included five millions of conversions in addition to the usual Public Works requirements. The question of making further conversions was left in abeyance and nothing further happened till they were right in the middle of the elections. “Then information came from our London financial advisers,” he said, “that the market was likely to harden and it was advisable to renew a further part of the twentynine million loan, and also borrow in anticipation of our next year’s requirements.” The question arose whether to act on, that advice or pit one’s opinion of the London fidvisers., j • He cabled to London asking how lc>ng a decision • could b'e delayed; and-the reply was that ’so long as the decision was made by the end of January he was safe in waiting. If Sir Joseph Ward had been tongue-tied during the sjiort session so was the speaker during the election. He (the speaker) had drawn Sir Joseph Ward’s attention during the short session to the loan renewals, and was told this was quite understood. Sir Joseph Ward- further said in view of the pro.blem wjiicb : . had; arisen he, did . not, protppse to |gd; dn» tlib' ;thp. meaiiiinie; ijiohxtiphj fj | j Almost; [lmmediately ? .Sjr [Joseph floats!: :dldjjjnstße 1 a decision- — ,thei righb, pijeffito Tcnqw, .anqtbe?- frvelye, |itfilij<)|(s | : |6f| [the] (twentyrfjve (• 'dHdt&ibbVriw * wlin't ihe sary for jihe coming year. From what, had ha pjpenfed since this was obviously,;, [the right decision,: ibCbause' -rfjie ;market ! ihad hardened and wa| not iso jfavpdr-jj *. p I’ , ,W;U .|f ■ *:: .! 1 11 -MI able now. 1 1\ ‘ ; “ The only complaint I have to make,” continued Mr Stewart, “ is the misinterpretation put on the Prime Minister’s remarks and the assumption that I suppressed something which was prejudicial to New Zealand’s financial reputation, and that this Would be exposed by the new Government. Neither I nor he could foresee that this suggestion would come from London, and xyhen it, did it. was obvious no publicity 4hbula ,be given to it until the Minister of Finance had made His decision. This, advice came from London. I paßSe&£il;; 4 ;pn, and did ; ysp- to, protect the position fopen;: ; I did’tli-e.i'ight and proper 'tbjng by' my leaving him freefttO decide in' ample time. ' But, I am still puzzlpjjl ’about that reference to Waiting two iyeara,“because my impression; .was that instead of waiting till April or May for 1929 requirements he borrowed in February.”