LIVING ON PAPER

Rotorua Morning Post, Volume 3, Issue 649, 29 September 1933, Page 5

LIVING ON PAPER

(Press Assn.

a bad system GOVERNMENT CRITICISED FOR TREASURY BlLL* ' ISSUE * TRADE WITH I.O.U.'S

— By Telegraph — Copyright).

Wellington, Thursday Speaking in the House of Representatives on Wednesday, Mr. H. Ifolland, Leader of the Opposition, attacked the Government's system of using Treasury bills and deelared that in recent years Cabinet had been living on paper. "Treasury bills have been issupd 011 a tremendous scalq," said Mr. Bplland, "and the Goyernment hps, Micawber-like, met every I.O.U. with further I.O.U.'s." By issuing Treasury bills the Government simply pawned the State's security to the banks. The banks did not give the ■ Government legal tender in retprn for these bills, but siipply created a book entry in favour of the Gpvernment, and the Government drew cheques against that book entry. Replying, the Hon. J. A. Young said Treasury bills were. a charge against anticipated revenue and were redeemed. Mr. Holland: Has that been done in recent yars? The Minister: As the revepue comes in the deb't is repaid. That is the practiee. If there is insuifficient revenue coming in to redeem Treasury bills arrangements are made to convert into loan. At times like fhese it is necessary that the State shoqld have power to do^hat ~ Mr. Holland: What apioupt of Treasury bills have we floated po^v — £7,000,000? The Minister : I could no.t say fron) memory.