The Daily News. FRIDAY, JULY 15, 1921. STATE FINANCIAL DIFFICULTIES.

Taranaki Daily News, 15 July 1921, Page 4

The Daily News. FRIDAY, JULY 15, 1921. STATE FINANCIAL DIFFICULTIES.

The latest pronouncement by the Acting-Premier (Sir Francis Bell) on the position of the Dominion’s finances is as remarkable as those which have already emanated from the same source. Allowing for the fact that Sir Francis is an eminent lawyer and not a financial expert, it woul(i only be a charitable act on the part of the public to credit the Treasury officials rather than the Acting-Pre-mier with the responsibility for the incoherence of this latest pronouncement. The avowed object of this Ministerial manifesto is to make it clear there is no loan money available for public works —a fact that was already only too well known. If the Minister had only clearly stated the exact position of the country’s finances there would have been material on. which the public could have formed an approximate judgment as to the correctness or otherwise of the contention that the finances were sound—-in the ordinary meaning of the term—but by adroitly beclouding the figures given no ordinary light can penetrate the veil in which the position is enshrouded. The Minister starts off by stating that last year’s surplus was over 84 millions, though the amount in the bank to the credit of the Consolidated Fund was less than 44 millions, the available funds in London being £2,131,000, plus a reserve of two millions, but these London funds, being less than sufficient to meet requirements, will have to be supplemented later—whether out of loan money or otherwise is not stated. The only provision made for public works expenditure appears to be the sum of £1,167,000, which was invested in Government securities in the Dominion. Mention is made of the payment of interest on loans raised in London and the Dominion, but as part of the loan recently raised by Mr. Massey in London is to be used for paying interest on loans the position becomes complicated and unintelligible, consequent on the shuffling of the figures like cards in a pack. Before March 31 there was set aside a sum of £1,167,000, partly for public works and in other part for loan redemption. Since tha? date a further sum of £1,032,000 has been taken out of the Consolidated Fund and invested in Government securities, “in consequence of the extreme difficulty of obtaining money for capital works.” These transactions, as described by the Minister, may mean anything—or nothing. By implication both would seem to apply to public works expenditure, but in the former case the money is associated with loan redemption, and in the latter is merely vaguely referred to in connection with the difficulty of “obtaining loan money for capital

works,” so that it is possible in both cases that public works may not benefit therefrom. Why not state definitely and frankly exactly how the money is to be used? It is this reticence that engenders suspicions for which actually no grounds may exist. The fact is the Acting-Premier protests too, much and takes the people into his confidence too little. His latest statement confuses rather than explains the financial situation, and he would be exercising more wisdom by silence rather than acting as the mouthpiece of ingenious but scarcely ingenuous Treasury officials. No one can study the last quarter’s banking returns without being impressed with the seriousness of the financial situation in the Dominion, for whereas during the war period, and up to nine months ago, the returns showed the banks had a plentiful supply of funds as demonstrated by the excess of deposits over advances, the June quarter shows an .excess of advances of nearly nine millions, so that if the figures for 1920 are taken, showing an excess of over 104 millions in deposits, and the figures for the June quarter showing nearly nine millions the other way, there is a diminution of nearly twenty millions. The figures speak for themselves, and, of course, show that the finances of the country are being strained to bear the greatly increased volume of imports. Only when the latter get into consumption, and prices for our products recover, will the strain be relaxed. Happily for the country there are signs of an early improvement in both respects.