THE BORROWING POLICY. [Weekly Press.]

Te Aroha News, Volume III, Issue 139, 30 January 1886, Page 7

THE BORROWING POLICY. [Weekly Press.]

The supporters of a large borrowing policy are very anxious to make out that those who object to large loans for unproductive works are desirous that the people of the colony should lie dowu and die. This is certainly far from being our desire, as our readers ought to know. We do not, upon principle, object to a borrowing policy. A borrowing principle, if the money borrowed be really spent upon permanently reproductive works which yield sufficient revenue to pay the interest upon the loan may be a most enlightened policy. What we say is, that in the past our Parliament has shown itself singularly incapable of spending borrowed money wisely, and as we have no guarantee that it is going to be any wiser in the future, we object to its being still further debauched by being entrusted with the spending of another huge loan. We recognise that it is impossible that we can "stop borrowing all

at once. But because that, is impossible we do not see why we should suddenly incrpii^ to an cnounous extent tne" rate at which wo have been borrowing, le is r^jilly amusing to notice that the alvocates of tin 1 borrow and burst policy call themselves the energetic, industrion-, and enterprising party. What funny notions of energy, industry, and entovpnse they must have. Their energy means zeal for borrowing, their industry means great activity in spending, their enterprise means fertility in devising schemes which furnish an excuse for borrowing or spend- | ing. The spendthrift who is continually raising money from the usurers in order I to supply the demands of his lavish ex- [ penditure is no doubt often a very ener- j ! getic and industrious young man. If i he could only be got to exercise the ] energy and industry with which he bor- \ rows and spends in some more useful way he would make himself a most desirable member of society. We object to have it said of us that we are opposed to an energetic and industrious policy simply because we object to the raising of huge loans for the purpose of building political railways. j The desire for a large borrowing policy does not spring from any widespread bona jide wish, to have certain public works executed. It springs from the desire to do something to remove the depression. That our trade is in a depressed state we do not deny, but we do say that it is not more depressed here than in any other part of the world. We are not making the large iucomes which we made— upon paper at least — some years ago. But the great majority of us are making comfortable livings, and paying our way, which is more, we suspect, than many people in the same rank of life are doing in many other countries at the present time. But whether or not the depression be as severe as the croakers and borrowers like to make out, ol this we are sure that it is not a depression which can be removed, unless temporarily, by large loans with their necessary consequences, large additions to our taxes. The Government policy is supposed to mean raising a loan which is variously estimated at from five to ten millions of money. This means, according to the Premier, extra taxation of from £200,000 to £400,000 per annum. To try to remove depression by increasing taxation to this extent is to act upon the counter-irritation principle, which leads an inconsiderate cabdriver to try to relieve his horse from the annoyance of flies by flicking it with his whip. The worst feature of this borrowing policy is that it is one in which so few people really believe. Whatever men may say •n Jthe platform or in the newspapers they almost all admit in private conversation that the remedy will only suppress the disease for a time, when it will break out in a worse form. In other words nearly everybody admits that though they hope that the spending of a large loan will make things very lively while it lasts, yet that it will produce a much worse state of stagnation than we are in now. If this is ao, then it may be asked what makes so many people want another hug« loan ? The answer is that they believe that while the borrowed, money is being spent they, personally, will be able to ,' realise | their properties — at present, according to them, quite unsaleable — » and make a nice little provision, for the bad times which are to come after the borrowed money is spent. There is no doubt that this Jesire to realise upon pioperty is at the bottom of the cry for more borrowing, such as it is. Now we have the deepest sympathy with those who have property on their hands just now upon which the outgoings are nearly as great, or are greater, than the incomings ; and they are a tolerably numerous class just now, unfortunately. It is chiefly because they are so numerous that we feel satisfied that a large loan will not do them any good, oven temporarily. In the first place, the pi ice of rural land depends entirely upon the price of what is produced from it, and therefore it is only if the price of agricultural products should rise, that we can hope to see agricultural land rise in value. This rise in the value of produce will certainly not be effected by public expenditure. We deny that good agricultural or pa9toral land is unsaleable even now. It is always saleable at a fair price — that is to say, at a price which, taking the average of years, it will pay to give for it. Unfortunately, so great has been the fall in the price of farm produce during the pa9t few years, that buyers will not, if they are prudent men, give the price which was given some years ago, and which probably was given for it by the man who now wants to sell. But wherever the circumstances of the seller enable him to take the true Talue of his land, we believe that he can find a purchaser if the land is worth buying at all. There is certainly no lack of money in the market available for enabling prudent buyers to purchase land. Embarrassed fanners must there fore not hope to be able to sell their farms at increased prices, shnplj because five or ten millions of money are being J borrowed by the Government. The price of town land is of course governed by more complex considerations* But he is verdant who supposes that town laud is going to increase much in price because of a large Government expenditure, lasting only for a few years. Thefe is really so much land being held at present by mortgagees and Lani Companies and other people, which is intended to be offered for sale as soon aa j prices improve, that whenever there is the slightest tendency for the price of I land to improve the competition amongst vendors will be so great as to counteract that tendency and keep the price down. If laud*ownera could only be brought to

see the truth of- all this we are sure that they would not be very anxious to support n policy of ri'oklcss an»l exiravagiuit borrowing.