Wairarapa Age MORNING DAILY. SATURDAY, MARCH 4, 1911. OUR LOAN FLOTATIONS.
Mr James Allen, the member for Bruce,; is" one of''the'-'moat caustic critics of Government ' finance • the Dominion ; possesses. His criticisms are always straight and... to .the point, } and he seldom fails to impress his auditors with the-truth of his assertions. In a- speech deliver-ei-ed, in the South, last week, Mr Allen traVersed the 'financial operation's of the Government in, recent years. He laid stress upon the point that, although the revenues had increased enormously during the last.few months'—which he. attributed to, the increased charges fox* long-distance travelling on the railways, the taxation on Banks and Jttadng Clubs, the increased death duties, jthe Customs surtax and the graduated income tax—the expenditure had increased in still greater proportion.' At the same N . time he pointed out that the public works expenditure had decreased' by £lsl-000 as compared with the "previous yedr'. This is an aspect of the situation .which is by no means re-, assuring. Continuing his criticism, Mr Alien devoted considerable time to the flotation of our loans in the English market. "We are in the lark,' we members of Parliament, about these. loans/' he,, began, and lie went on to say that they used to get returns, of the cost, but for bhe last four years or so : these had ieen persistently refused. He was Wherefore unable to state what was j £oing on with regard to the cost of raising loans except so far as he jquld gather from the published ac}ounfe;'.:He'wouH. give an' instance rf\the cost, so far,as he could gather it, and that was of the Aid to Public Works Loan, 1909, for one niilion. Apparently that loan had :ost us £34,911, or close on 3J per sent. As no particulars were given >f the cost, he made the statement hus halHly, and it was the fault of he Minister of Finance himself, if ie had a • satisfactory explanation >f the cost, that he'had not given !it ►efore in the returns that had been ssked for. » It seemed a very, heavy, ihargi,:and he left ,:"t to the people o'judge.: "'The secrecy ( bein.; 6b-
served was not consistent with .parliamentary government or with the rule of the people, He also wished to say a few words with regard to the floating of the huge loan of five millions. The history of the legislation which led to the State-guaran-teed Advances Act going through Parliament had not yet been wi itten, and it was probably only known to tne Prime Minister. When the Prime Minister was at the Defence Conference in London, what took place between him a2id the British financiers he (Mr Allen) did not know, but the Prime Minister came back to Parliament and told the House, when .he was dealing with the Bill, that he was "warranted in saying that the money we require when the Bill is passed can be got at a rate of interest not exceeding 3| per cent." How came he to be so warranted,? what arrangements did he, make "with the London financiers? He had never told the House what they were. Did he pledge himself to put ' the whole of the loans in one lump sum on the market ? Did he pledge himself to the underwriters? Have .the underwriters got us in their grip? These were all questions that ought to be answered, and would (have to be answered yet. "With respect to the loan itself, the Prime Minister seemed to he satisfied. He "seemed" to be, but he was not in reality. He knew it was not a The underwriters .were loaded with almost the whole of it, and the Dominion had to pay 1 per cent, for ; taking this burden. -In addition to that, those who took up the loan took £1 10s per cent, from us. In addition to that, if they liked to convert into inscribed stock at 102 they got another 2 p"e"r cent, from us, and if they made payment in full by the 28th November, 1910, they got, approximately, another 18s per cent, from us. So that, so far as he could . judge, assuming 'these conditions to be complied with, we got abQuit<£94 7s for every £IOO we had to pay back. Further, 1 we paid to those who converted before the Ist December, 1910, into inscribed stock five months' interest on £lO2, which was not earned, being about another 30s per cent. It was a costly loan, and it affected the English markets, and the newspapers said so, whatever the Prime Minister might say.
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Wairarapa Age, Volume XXXII, Issue 10180, 4 March 1911, Page 4
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762Wairarapa Age MORNING DAILY. SATURDAY, MARCH 4, 1911. OUR LOAN FLOTATIONS. Wairarapa Age, Volume XXXII, Issue 10180, 4 March 1911, Page 4
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