The Daily News. TUESDAY, OCTOBER 4, 1921. FINANCIAL MATTERS.

Taranaki Daily News, 4 October 1921, Page 4

The Daily News. TUESDAY, OCTOBER 4, 1921. FINANCIAL MATTERS.

Now that Mr. Massey has returntd to the Dominion after participating in the most important conference of Empire Premiers that lias yet been held,-the attention of the people of New Zealand may naturally be expected to be concentrated on matters connected with finance. Although the six. million surplus that was shown as the result, of last year’s income and expeiulilure lias disappeared, and the five million loan raised in London by the Premier has been left there to meet liabilities, Mr. Massey has, he states, brought back half a million of the reparation money paid by Germany, and we are led to expect a yearly payment on that account of a million and a half for the next thirtyseven years—if, as he expects will be the case, Germany carries out her obligation to pay her reparations indemnity. In his speech at the civic reception tendered to him at Auckland last week, Mr. Massey alluded with evident pride to “the very high repute of New Zealand’s finance in London,” arguing therefrom that the prospects of the Dominion were better than those of any other country that took part in the war, testimony fully corroborated by Sir John Findlay. When replying to a deputation which asked for his support for the Arapuni hydro-eleetrie scheme, the Premier assured the members of that deputation that the London market was quite favorable for raising loans, adding that his experience there satisfied him that rates of interest were coming down. It would not, therefore, seem to be unreasonable to assume that Mr. Massey will not, under the circumstances, be reluctant to put this favorable turn of the money market to the test by obtaining the sanction of Parliament to the raising of a loan sufficient to meet the pressing requirements of the Dominion. With a falling revenue, and the need for public works on a large scale that will ensure employment for those who are now undergoing enforced idleness, there appears no alternative but to borrow on the London market, and thus help the country to turn the corner before next, winter, as Mr. Massey feels assured will be the case. It is to be hoped this optimistic forecast may be realised, but by no possible chance will it. be unless a drastic reform is instituted in relation to the Government’s spending policy. The squander mania of war time exercised a most demoralising influence, and led to the growth of extravagance and economic waste that still clings to the State Departments. Although Dr. Thacker’s attack on the Government during his speech on the Address-in-Reply debate last week was remarkable for its intensity and party color, it nevertheless contained much truth, and one of the most serious tasks the Government has to undertake, without fear or favor, is making a thorough overhaul of tbe expenditure that has grown out of all proportion to the needs of the public service. It will be noted that Mr. Massey is still obsessed by the fear that the British Navy may become so emaciated that Britain will be only a third-rate Naval Power. If this means that the Dominions must keep the Motherland up to the mark by bearing the expense of additional warships it savors of a jingoism that should be effectively crushed,and would certainly impose on the Dominions a burden they could not stand. The main object of the Disarmament Conference at Washington is to relieve the Great Powers of the present oppressive burden of armaments, and one of the functions of the League of Nations is also to carry out the same purpose. There is not the slightest danger of the British Navy losing its superiority, so that the Dominions, while contributing their fair share of the cost, may be spared from being scared into contributions that are as unnecessary as they are unjustified. If they are to recover from the present financial stringency and obtain a reasonable chance of expanding their industries and developing their resources, there must be the most stringent economy, and the matter of naval strength be removed from the sentimental environment and placed on a satisfactory business footing. Although Mr. Massey views the state of the wool market hopefully as to higher prices ruling in the not very far distance of time, he can offer no encouragement to the producers of beef. Meantime the low prices will seriously affect the revenue of the country, so that, unless expenditure is greatly curtailed, New Zealand’s present high position on the London money market may suffer a relapse. It is action that is needed if Mr. Massey’s optimism is to be realised.