SIR JOSEPH WARD EXPLAINS

Sun (Auckland), Volume III, Issue 735, 7 August 1929, Page 6

SIR JOSEPH WARD EXPLAINS

“London Money Market Mystery” EMBARGO NOT FOR TWO YEARS (THE SUN'S Parliamentary Reporter) PARLIAMENT BLDGS., Tuesday. THE climax in “the London money market mystery” Parliai mentary melodrama was reached in the House of Representatives tonight when, after Sir Joseph Ward had, in the afternoon, explained his embarrassment by the alleged undertaking not to go on the London market, the Hon. W. Downie Stewart said his piece in the evening, and claimed that the unfairness of the accusations made by the Government, and by the Prime Minister in particular, were obvious. He said that the statement was very extraordinary, very contradictory. very unfair, and long overdue. Sir Joseph Ward, in his statement, maintained that he had been embarrassed by the situation that had arisen, but admitted that the period affected was eighteen months, not two years. The loan had been raised in January, 1929, instead of May, and there was an understanding that no other loan would be sought until after May, 1930.

The Leader of the Opposition, the Rt. Hon. J. G. Coates, asked a question early in the proceedings to the effect that the Prime Minister, as Minister of Finance, should give the House an explanation as to why he was prevented from going on the London market for two years, as he alleged. The Prime Minister explained that when he had come into office he had found that his predecessor had left over a decision regarding borrowing proposals for two months, despite the fact that the Treasury was anxious to arrive at a decision. Naturally anxious to go on with borrowing proposals, in accordance with his promise to the electors, the Prime Minister had discovered that it was impossible for him to go on to the London money market from January, 1929, until May, 1930-—a period of 18 months—except under certain conditions. OFFER FROM ANOTHER COUNTRY The late .Minister of Finance had been correct in saying that the Government load not been excluded for two years. It had been excluded for 18 months. The position was the most unusual in Sir Joseph’s experience as a Finance Minister, and had it not been that the local money market was favourable, he could not have obtained the finances needed to carry out the policy of the United Party. He had been thrown back on his own resources. Sir Joseph said that he had been offered £2,000,000 by one country, but he had preferred to rely on the local market. The fact remained that the Government was excluded from the London market for 18 months. Mr. Stewart: By what? The Prime Minister: By your decision. Mr. Stewart: I did nothing to exclude you. The Rt. Hon. J. G. Coates, heatedly: Why not be candid? Either apologise or don’t. Sir Joseph Ward, addressing Mr. Coated. You know nothing about it. After this retort there was a general disturbance in the House, interjections coming from all sides, until Mr. Speaker had to restore order. The Prime Minister said that he was glad to be protected, as he was not used to such vicious attacks. He

denied that the way had been left clear for him. Mr. Stewart: I will deal with that tonight. Speaking after the dinner adjournment. Mr. Stewart said that Sir Joseph for some weeks had allowed serious accusations to stand against him and had refused redress, and had declined to lay papers on the table of the House. He had allowed his colleagues to attack Mr. Stewart time and time again, and he had repeated the charge whenever the matter had come up. The mystery turned on the simple question as to whether the Prime Minister should accept the advice of his London advisers and borrow the year’s requirements a few months before the normal time. That such a policy involved borrowing twice in one year was a mere accident which, as the Prime Minister had said, might have happened to any Government. Sir Joseph Ward had said in the afternoon, however, that Mr. Stewart had left the decision over for two months, despite pressing pleas from the Treasury. That was not correct, as both the Treasury and Cabinet had agreed with Mr. Stewart that it would be most improper and unfair to settle the question in the manner with which the suceeding Minister of Finance might not agree. Had the question been settled then, Sir Joseph might well have complained that Mr. Stewart had anticipated him. PRECEDENT FROM 1912 Next Mr. Stewart harked back to 1912, when the Liberal Government went out of office. During the Mackenzie Government term a £4,000,000 loan was negotiated on the London market and when questions were raised in the House as to whether Sir Joseph Ward should have not arranged the load Sir Joseph Ward had said that he had put on record, during the short session of that year that he did not feel justified in raism S the £4,000,000 loam in the previous February, and that he had left the position free and clear for his successors. Mr. Stewart said that he had followed a good lead in acting in the same manner as Sir Joseph Ward had m 1912. Regarding the Prime Minister’s reference to the arrangement of a £5,000,000 loan, Mr. Stewart said that a possible explanation was that just before the Reform Government went out of office, and it was obvious that the incoming Treasury would ha.ve to settle the problem awaiting solution, the Treasury advised that it would be a help if material for the prospectus were forwarded to London. Quite probably the Treasury had assumed that New Zealand would float a £5,000,000 loan at that time, in conformity with the practice in the past. It did not in any way involve the incoming Minister of Finance, who indeed had succeeded in raising a £7,000,000 loan. There was no commitment, obligation, or embarrassment, but the position had been protected in every way for the succeeding treasurer. Nevertheless, ever since the election there had been “the mystery” innuendo, and statements that the Prime Minister had been embarrassed by some action of Mr. Stewart’s, whereas a glance at the file would have been all that was required to show that nothing of the sort took place. “I have e.very reason to complain, as it may be the fate of any other member to find himself in the same position.” said Mr. Stewart. “If the facts are to be misrepresented and distorted for party purposes, public life will become intolerable in New Zealand.”