The Stratford Evening Post WITH WHICH IS INCORPORATED THE EGMONT SETTLER THURSDAY, JULY 20, 1916. THE PUBLIC DEBT.

Stratford Evening Post, Volume XXX, Issue 92, 20 July 1916, Page 4

The Stratford Evening Post WITH WHICH IS INCORPORATED THE EGMONT SETTLER THURSDAY, JULY 20, 1916. THE PUBLIC DEBT.

—. — I The latest--table of figures regarding' New Zealand's public debt is somewhat startling. It shows the total net indebtedness, and tho indebtedness per head of population during the last nine years to be as follows: £ £ s. d. j ■ 1907 62,130,972 67 19 10 | 1909 09,159,310- 71 Uh 6 • 1911 79,323,636 78 13 2 j 1913 87,4.57,121 82 7 5 1914 91,689,835 81 , 2 8 1916 105,957,433 '96 5 9 In commenting on these figures the Auckland Star shows that as the figures are for the end of each financial year, those for 1914 represent the increase for the period of peace. In seven years our debt increased bv; thirty millions. If we go back an-i other eleven years to 1896. which was near the beginning of tho present j period of prosperity, we fIiTH that the net debt was £42,271,889, and tho debt per head £6O. The debt hasj therefore increased very much fasterj than the population. For the last two financial years the net debt bus been increased by over fourteen nul-| lions, most of which has been due to, the war, and Parliament has now before it proposals for loans totalling seventeen millions, of which one million is for public works. That is to say, by next March the public debt may be £123,000,000. The Star goes on to Bay: Wo do not 'draw attention to these figures from any desire to curtail necessary war expenditure.. Whatever has to be spent in helping to defeat Germany will be trifling when. weighed against the alternative to victory. Our object is to show the need for caution it! finance. Hitherto the New Zealand Government has. been able to reply to critics of the borrowing by pointing to the ropro-j ductive nature of a great part of the debt. According to the "Year Book" for 1915. nearly thirty-three millions of the debt was invested in "directly; reproductive undertakings," such as railways and telegraphs; nearly thir-ty-two millions had been expended in "investments," such as advances to settlers; and nearly twelve millions, bad gone to "indirectly productive" j enterprises, sujch as roads and bridges and immigration. Of a hundred millions of public debt, about seventy- 1 seven million was classed as directly or indirectly productive, and twentythree millions as unproductive. But certain facts which materially modi-

fy this classification have to be considered. The railway revenue, for instance, barely pays interest on capital, and in the accounts of the Post and Telegraph. Department "<> account is taken of such interest. A\ e are now making large unproductive' additions to our debt. The war loans proposed this year are alone greater than the amount spent on railways between 1891 and 1915. Our method of finance must, therefore, be different to what it has been in the tv-'". Hitherto we have not accumulnt: u ] nr rrn sirkhig f::mh, but in the future we shall probably have ,o follow the

example of the Liberal Government at Honlc, which, inheriting n greatlyincreased debt as the result oi the, Somh African war*, paid oil. many millions in a few years. The Lyttelton Times also discussing finance, compares the increase in New Zealand's debt with the increase in the value of her exports. "The growth of the public debt is totally inconsistent, and sadly inconsistent, with-.the,. enormous prosperity that has come to the Dominion through the war. During the two years in which more than fourteen and a-quarter millions were added to the national the Dominion's exports were worth,' in round numbers, £'61.(190,0(10, compared with £46,000,000 in ; the two preceding years. The value r ol" ex-j ports in excess of imports in the I'm-; ancial voars 191 1-1.1 and 1015-16 was little short of £20,000,000. These

figures arc simply staggering, but they are correct, and we must say that they constitute a heavy reproach on the community for piling up indebtedness and interest charges at the rate now revealed."