THE NEW LOAN.

Taranaki Daily News, 14 December 1921, Page 5

THE NEW LOAN.

SUM OF FIVE MILLIONS. HOUSE PASSES THE BILL. MONEY FOR PUBLIC WORKS. By Telegraph.—Press Association. Wellington, Last Night. In the House to-night Mr. Massey moved the second reading of the Aid to Public Works and Land Settlement Bill, under which he said it was proposed to raise £5,000,000 for tha following purposes:— Construction of .railways, additional rolling-stock for open lines, and such other worlds and purposes in connection therewith as may be authorised. Construction of roads, tracks and bridges for the purpose of opening up the backblocks. Developing goldfields and such other works and purposes in connection therewith, as may be authorised. Othet public works. Mr. Massey said he did. not propose to raise the money at once. It was not advisable to do so, because they must do nothing to impair the credit of the country. At the same time’ they must have authority to borrow when the time was favorable to'do -so. At present they had five thousand men employed by the Public Works Department and it required but little Consideration to realise what a large sum of money this absorbed in wages alone. A'good deal of money was also absorbed by the purchase of railway rolling stock, which fell far below requirements during the war. MONEY CHEAPER.

Then there was the electrification of the Otira tunnel, which would cost about £1,000,000. That expenditure., however, be thought justified. The Lands Department was also in need of a great deal of plant for swamp drainage works, and there was also other heavy expenditure, in the Public Works Department. It was unfortunate that this money should be required at a time when there was such financial stringency, but .he was sure we would pull through. He was confident money was becoming cheaper, and if we were able to keep off the London market for a reasonable time we would do better than at present. We could not profitably borrow money when we had to pay more than six per cent. Discussing the financial position of the producers of the country Mr. Massey said the land tax was coming in very well. He hoped that in about three weeks the whole of it would be paid, but he wished to point out that threefourths of the farmers had now to pay it out of capital, which could not go on indefinitely. Coming to soldiers’ settlement, he said he could raise more money for this purpose, as he had the necessary authority, but he would have to do it in London. He could not raise such a loan locally and the time was not opportune to do it in London. This loan, however, was needed, and we must have it Mr. T. M. Wilford (-Leader of the Opposition) said the time had come in connection with our loans when we should take steps to stabilise our stock in London. There were reputable firms in London who attended to this, and what we should do was to first decide the price below which our stocks should not fall, and then appoint one of these reputable firms to see that stability was assured. BORROWING OPPOSED. Mr. J. McCombs (Lyttelton) considered a mistaken policy was being pursued in connection with sinking funds. Mr. W. T. Jennings (Waitomo) wanted to know what had become of all the millions already borrowed. Promises had been made of roads for the backblocks ten years ago, but to-day there were neither roads in the backblocks nor money in the Treasury. Mr. R. McCallum (Wairau) sounded a note of warning against this profuse borrowing of millions, and when the Bill was in committee he would move to reduce the sum of £5000,000 to £3,000,00°. The Hon. J. A. Hanan said the public accounts showed a steady increase in expenditure. This called for caution, and before the House was asked to pass such a Bill as this members ought to have a, full statement ’of the Government’s proposed economies. There should be an exhaustive inquiry into the financial administration of all departments, because he believed there had been great laxity in the keeping of the public accounts. He could not support this loan without further information. Dr. A. K. Newman (Wellington East) said it was all very well to borrow money for public works, but he wanted to know what the Premier was going to do for the urgent necessities of soldiers.

Mr. H. E. Holland (Leader of -the I>abor Party) condemned the system of carrying on the business of the country on borrowed money. The interest charges were enormous, and when the Government was asking the workers to accept a reduction in wages to make the accounts balance, he. contended a similar demand should be made on collectors of interest. But while no protest was made against breaking a contract with working men, the moment a on interest was suggested a cry of “repudiation” was raised. Mr. C. E. Statham (Dunedin Central) contended that if dl-ring the war the Government had made a levy on wealth in proportion to its ability to pay, as lie suggested at the time, that course would have extricated the country from all its financial troubles. This Bill should have been referred to the Public Accounts Committee and the House should be given a full and candid statement of particulars. PREMIER’S REPLY.

In the course of his reply Mr. Massey said as soon as possible he intended borrowing £1,000,000 for soldiers settlement, but he was not going to be a party to putting soldiers on agricultural land who lia(J no previous experience of agriculture. He maintained we had made a levy on capital, and what was more we now had the money invested in the best security in the world —the lands of the country. had every confidence in the future of the country, because we had the assets, and there was no justification for taking a pessimistic view of the position. Pessimism was no good to anyone. Some people were predicting blue ruin and proclaiming that we were going to have a deficit. It would be little wonder if we did, because he did not know

of any British couhtry that could snow a surplus for the last twelve montns. But we were 3J months away from the end of the financial year, and he was going to predict a surplus, and predict it confidently. His aim was to reduce expenditure by £4,000,600 and increase the revenue by £2,000.000, and when that was done he thought there would be nothing wrong with the finances of the country. This Would not be done in a day. It would take at least twelve months to do it. Something had been said about purchasing the Dominion’s stock in London. This he proposed to do, utilising some of tne surplus sinking funde for the purpose. H» •asked his fellow citizens to fa.ee the position with courage and determination, and we were certain to win out. The second reading of the Bill was carried, and the House immediately ‘went into committee on the Bill. Mr. McCallum moved to reduce th*> amount of the loan from £5,000,600 to £2,000,006, but on the Premier giving bim the undertaking that he would en*deavor to raise the money, within the «Dominion, he withdrew the amendment. i The Bill was reported from -commit* tee without amendment, read and x hird time and passed.