Rangitikei Advocate FRIDAY, APRIL 16, 1909. EDITORIAL NOTES. MANAWATU ARGUS.

Rangitikei Advocate and Manawatu Argus, Volume XXXIV, Issue 9420, 16 April 1909, Page 4

Rangitikei Advocate FRIDAY, APRIL 16, 1909. EDITORIAL NOTES. MANAWATU ARGUS.

THE men in tins country who transact business, and who know all about financial matters, have declared when in conference assembled, that the Ministerial policy of taxation has driven money out of the country and has made if almost impossible to borrow money for uss in New Zealand. The Premier, who evolves surpluses out of nothing, resents this plain statement of face, and attempts to deny it. He is a well-known master of misrepresentation, and it

Is rather anting to note the manner in which he replied to the statements made hy men who have no interest in stating anything but fact, and who are thoroughly con - versant with their subject. The first statement he attempted to explain away was that the Government is responsible for the stringency in themoney market, because it has absorbed local money. His reply was that during the last twelve months Government had not borrowed from the public more than £IOO,OOO, but had on the contrary brought several hundreds of thousands of pounds into the country. It will be observed that Sir Joseph refers only to the past twelve months, whereas the absorption of local money has been going on for a long time. For instance the Government has tained the bulk of the funds collected by its departments, such as the Insurance, Publio Trust and Savings Bank. The Government debentures held by these total more than fifteen millions, to say nothing of money borrowed from friendly societies, etc. Ml tyiis nas lessened the amount available for use, because most of it has been sent out of the country to pay the interest on borrowed money. The business men are assuredly justified in stating that Government is responsible for the S stringency because it has absorbed local money.

THE Premier alleged that the real cause of the stringency wap the action of the banking institutions and the drop in values of prodnoe.Though these things must cause temporary embarrassment, however, they do not account for the position. He also conveniently ignored the fact that even if hanks become reluctant or unable to lend, and if prices of produce fall, there would, under proper conditions, he a flow of money to this country where it could earn high Interest on good security,—good so far as value is concerned. the complaint is that Government by its action has prevented this flow from setting in. Capital demands security, while the policy of the Ministry for years past has been to attack it on every possible occasion. Hence its withdrawal from the country and the determination of capitalists not to risk investment in New Zaaland, even though [borrowers would willingly pay higher interest than can be obtained elsewhere. The recommendation of the business men—‘‘That the incidence of the graduated tax on land generally, and especially as affecting the interests of private individuals in companies, be carefully reconsidered with a view to such tax being wholly or partially abolished” —is made in the best interests of all the people in this country.

IT is no answer to the statements of these cool-headed and shrewd business men—men representing the trade, commerce, and industry of the country—to allege that things must be right because the Government can borrow money at 4 per cent. No one has questioned the ability of the State to borrow, on the security of its assets. It would indeed be deplorable if it could not, and it would mean dire disaster. The complaint is not that Government cannot borrow, but that while it |has absorbed many millions of local money,—which has gone out to pay interest instead of being employed in our commerce and industries—it has instilled into the outside capitalists such fear that it is impossible for private persons or companies to borrow money from them. The existence of this fear is the only thing that can explain the impossibility of borrowing money for use in New Zealand at high interest, when the rates are so low in ocher countries, and money is so plentiful in them.

THE Premier alleges that it is desirable to retaiii the graclnated tax to ensure the closer settlement of the land. Bat though closer settlement is desirable, it does not follow that this is the best way to achieve the end in view. It would no donbfe be quite possible, by the application of taxation, to compel every landowner to sell all bis land, except such portion as he could cultivate with his own hands, but stagnation would result. Sir Joseph should be made to understand that the inflow of capital and its use here must be encouraged, not prevented by foolish laws.