The Daily News. SATURDAY, MAY 16, 1914. THE DOMINION'S FINANCES.

Taranaki Daily News, Volume LVI, Issue 295, 16 May 1914, Page 4

The Daily News. SATURDAY, MAY 16, 1914. THE DOMINION'S FINANCES.

Mr. Iline, M.P., told the Stratford pco- ( I pic the other evening that the reason | for the greatly reduced surplus this year j was the extraordinary expenditure in connection with the smallpox outbreafc and the strike. The reduction of a surplus of £807,000 to one of £400,000 cannot be accounted for in this way. The revenue increased on all sides. Only the other day Mr. Allen stated that every item of revenue showed an increase over the previous year, excepting territorial revenue, and this would have shown an increase but for the fact that the money derived from cash sales of land was not now treated as revenue. The total increase in revenue was £495,398. The strike and smallpox arc stated to have cost about £1*20,000. If the Government had been as clever in the management of the affairs of the country as they promised the people, the financial year would have shown a surplus of over a million.' But the figures reveal that after making due .allowance for the strike and smallpox outbreak the country went back to the extent of £782,000. No doubt the increase in revenue could not have been brought about without a certain increase in expenditure, but tlie surprising feature is that the expenditure j should be mounting up in a way out of all proportion to the increase in revenue. Take, for example, our railways. The revenue for the year rose by £72,320, while the expenditure increased by £174,713. In two years the 1 - revenue has grown by £3OO,SIS, and the expenditure by £414,727, notwitlistasiing that fifty-six miles had been added : to the length'of the lines open for traffic in that period. The (iovernmcnt, which promised to cut down expenditure and increase the returns from tlie railways, has failed miserably. That fact is self-evident. If tlie (iovernmcnt continues its present policy, the expenditure must continue to increase, with tile likelihood of an appreciable increase shortly in rates and fares. Indeed, this had already been foreshadowed, It is the price we have to pay for "Reform's" management, or mismanagement.

THE OTHER SIDE OF THE SHIELD. | Another point stressed by Mr. Hinc in his speech was the state of the Post Office Savings Bank. The withdrawals previous to the -Reform" regime, he said, exceeded the deposits, but the position has since been reversed, the deduction being that the public luid more confidence in the country now that the Conservatives held the reins of office than in the days of the wicked Liberals. This statement the Premier and other members of the Cabinet have repeatedly made lately, and Mr. Iline, the loyal and trusting follower, has fallen into the same error, for error it is. There should be no excuse for a man with such profound knowledge of our finances as Mr. Iline possesses—or claims to possess—falling into the mistake, for the records are available to prove that only in one year during the long period the Liberals held office did the withdrawals from the Post Office Savings Bank exceed the deposits. Iu 1(110 the deposits exceeded the withdrawals by £1,013,424, and In Hill by £905,3:21. In the March and •lime quarters of 1912, when the Liberalswere still in office, the excess of deposits uns .£323,001 and ,C 259,000 re."pectiveiy. In the September and .November quarters, when the "Reformers" had charge, the withdrawals exceeded the deposit- by £40,708 and .01)2,183. This shows that Mr. Hine's statement was an niter reversal of Ike truth. The change was not caused by the fact of the "Ilefiirmers" being in office; it was . entirely due to the movement of the money market, which must always be the governing consideration.. It is wrong—niy. foolish- -for public men like Mr. Hinc lo claim that the change of (loverinnciit has restored confidence iu the finances of the country by inducing'

people lo deposit their savings ill increasing amounts with the State's Savings Pan!:. There was another matter mentioned by Mr. lline to which we would like to refer. He said: "The Liberals before leaving oflice had been making road-, bridges and other works, with the result that Mr. Mtisse'y had liven left with an empty treasury when he took oflice." This reads rather curiomisly in the light of the complaints made by Mr. Masscy, Mr. C. K. Wilson, M.P.,- and others, that the raiding and bridging- of I he country had been neglected by the past Covernmcut. This raises the ciucstion of commitments. What are the facts? There were £775,iiiiO worth of com mi'men Is or promises when the -'Reformers" got, on the Treasury benches. The Prime Minister recently said that there was only a sum of C 17,000 in Hie Treasury to m»et the commitments, inferring- Unit I he whole, amount was to he paid over at once. Now, these commitments of .C77.1.00D Were spread over a period of several years. One coinmiinien t, out of the above, amounting to £:!fin.i)!iu, was for the OUra. tunnel. As the-.' commitments were for local bodies, it is obvious that the amounts could not be ulili-e.d by those local bodies in the one year, and if they had lo late the whole of '.lie loan in one paynu'iit they would not lie able to use it all at once, and they would have < eminence.l to im-nedi-ately pay principal and interest while Ihe bull; of the money was unutilised. Mr. Hint's reference to Mr. Myers' raising of the. C-I,";(I0,(H)() loan on shortdated terms was not convincing. Mr. Myers' contention at the lime he went on the London market was that an a

not commit the country to a dear loan for 30 years. He said he felt confident that the money market would become easier in tile near future, and Urns allow the loan to be refloated on very much better terms. His prescience was borne out; and instead of this country having to pay an exorbitant rale of in- 1 tcrest for 28 years on ibis £4,500,000, the loan can now be redeemed on very favorable terms. This was sound business on. the part of -Mr. Myers. Mr. Hine said there was nnil-administration in connection with the Liberal Government mid the Advances to Settlers, yet the Liberal Government during its reign advanced nearly £14,000,000 to settlers and workers, and there has not been a loss of £IOOO out of that huge total, a fact which speaks for itself.