LOAN PROPOSAL.

Ashburton Guardian, Volume 53, Issue 202, 8 June 1933, Page 5

LOAN PROPOSAL.

DIFFICULTIES OF THE SCHEME.

STATEMENT BY MR COATES

(Special to the “ Guardian.”)

A TICK LAN Xi, June 7. Last evening, after lie had examined more closely the national loan plan placed before him by an unofficial deputation of citizens, Mr Coates discussed several of the more important points raised.

“The whole proposal is apparently a local adaptation of Mr ICeyness ‘Means to Prosperity,’ ” said Mr Coates. “It has little application in New Zealand, which is such a laige exporting country, that our economic position is bound up with primary prices at Home. When they lift our difficulties will be solved, and, until they do lift, to incur further liabilities would only be adding to our troubles unless the deputation’s proposals are connected with self-supporting projects. If this £10,000,000 were secured and used as suggested, the probable result would be a burst of artificial prosperity and afterwards we would be worse off. All experts advise that steady progress on sound lines is what is wanted, and a sudden burst followed by, a relapse would only retard progress by destroying what confidence is left, and lack of confidence is accentuating the present difficulties. The Government has already embarked on a comprehensive policy on a sound basis to bring down the market rates of interest, and this proposal would largely undo that work. “The reference to the Board of Currency is not understood, but if it is intended to mean note issues, that is straight-out inflation in its worst form, it would be hard to stop, and the country might easily go the way Germany went. The deputation proposes the expenditure of £2,500,000 on unemployment. We want to relieve distress as much as possible, but to make unemployment pay too high would only increase the numbers engaged in work which is less productive than private enterprise could provide. Unemplovment finance would break down under its own weight. Then it is proposed to advance £1,500,000 to local bodies for the prosecution of services and utilities and for general purposes. It is generally held that local bodies have borrowed too much already. “Regarding the sum of £0,500,000 for subsidies on primary products, producers are already receiving assistance through the exchange adjustment. A subsidy of Id per lb would cost £6,500,000. As a matter of fact, Bradford cablegram this morning show that wool is now on the up grade. The deputation also propose to spend £1,000,000 on roads and bridges. I would point out that the Public Works Department already has a loan programme of £3,500,00 on hand, and works to be done under that vote will all be of a selective nature. As to the proposal to spend £500,000 in the exploitation of gold-milling 'schemes, it must he remembered that gold is now double the 1029 price,” concluded Mr Coates.

'Pile Minister expressed his appreciation of the thought given to the problem .by members of the deputation, and emphasised that bis further comments were not intended so much as criticisms of the scheme as to point out what must be borne in mind in considering its practical effects.