DOMINION FINANCES SOUND

Manawatu Herald, Volume XLIII, Issue 2302, 14 July 1921, Page 3

DOMINION FINANCES SOUND

SCARCITY OF LOAN MONEY,

Wellington, July 12. j ; The Ac ting-Premier to-day issued a statement of the position of the Dominion’s finances on June 9th, explaining that publication had been delayed pending'the five nfillion loan negotiations in London. The Minister states that while the year's surplus was £8,591,208, the actual balance to the credit of the Consolidated Fund at New Zealand bankers on March 31st was £4,475,000. Tho London investments in realisable securities and <;ash at- credit in London amounted together (excluding the £2,000,000 reserve fund) to £2*4.31,000, and that amount in London is less than required, and must be supplemented later. Ante-, cedent to March 31st, the Treasury had invested in Government securities in New Zealand under the authorising Acts, partly to enable public works to bo curried on, and partly in redemption of loans failing due, the sum of £1,167,000. There was also over £BOO,OOO outstanding in London and New Zealand in the hands of imprestees, practically all of which had been expended, and a small portion only of which would be recoverable. During the two months expired since March 31st the ordinary current expenditure has largely exceeded revenue, but the Treaseury during those two months had paid in New Zealand for interest on New Zealand loans £1,540,000, and had paid in London for interest on English loans £l,322,000. The Treasury had further, in consequence of the extreme difficulty in obtaining loan moneys for capital works, found it necessary since March 31st to invest in authorised Government securities £1,032,000 from the Consolidated Fund credit. Large stuns were out in the hands of imprestees, practically nil of which had been expended, and there were some small credit balances at each of the several capital accounts, but most of them would require a supplement at an early date. The balance at the credit of (lie Consolidated Fund on June oth was £571,000, to which had been added £500,000 placed at fixed deposit, maturing at an early date, ft must, not be supposed that tho Dominion's financial position waq not absolutely sound. There was full provision for the performance of all its annual obligations. But it must be clear to every reasonable person that the real strain was in procuring capital moneys for further expenditure on public works, There were still some sources lrom which very limited funds, for those purposes could be obtained within New Zealand.

“The principal object, oi' this statement,” said Sir Francis Bell, “is to make it clear to the public that there is no possibility of tho further subvention of l§an moneys from the Consolidated Fund so far as concerns tho ordinary accounts of the country, for tho payment of interest, its creditors, salaries, wages and its servants. Its finance is absolutely sound and assured, but with regard to the provision of capital expenditure on public works, the financial conditions render the procurement of loan moneys ’in New Zealand exceptionally difficult,”