OUR LOANS AND DEBTS.

Auckland Star, Volume XLI, Issue 270, 14 November 1910, Page 4

OUR LOANS AND DEBTS.

The issue of our new 4 loan has been well received on the Stock Kxehange, and It is already quoted at a slight premium. At something over four per cent interest on the present price these debentures should be well ■wortli taking up, and Government is now relieved of any Anxiety about our immediate financial future. No doubt the success of this flotation is due largely to the accumulation of loanable capital at Home just now. Another reason is the comparative decline in popularity of other old-established public securities, which, like British consols, have suffered severely from the competition, of younger rivals. But after making all neceesary Allowance for these causes, we may fairly claim thai the f avouraMe hearing extended to our application for further loans is proof positive that our credit is soupd, and that our financial reputation is ac 'high to-day as ever it has teen. It is true that we have borrowed heavily, and that our total public debt represents a high average per 'head of population. But the leading British financiers have come to understand that, •when, ac in our own case, loans are expended on reproductive objects or on a Public Wioiks policy that develops the country, m<l iby promoting its settlement and ex- x ploiting its natural resources adds vastly to the national wealth, the bare ttatement of our total liabilities gives no fair indication of our true financial standing. That British capitalists and financial institutions have now absolute «onfldenee in our financial stability and Mβ fully convinced that our loan policy will ultimately justify itself to the full, }s conclusively proved hy their readiness , Xo accommodate ne when from time to time we come upon the market again.

. But while we have every reason to congratulate ourselves upon our financial position and prospects, it may -be aa well to remember that in handling public affairs, as in private business, it is necessary to exercise care and caution, and to guard against the temptation to discount the future too heavily. Mr. Maasey had a few remarks to make on this subject in the House last Friday night) and the leader of the Opposition was quite justified in reminding memlbera that. Parliament has authorized exceptionally heavy borrowing this session. The Pulblic Works loans, including railways, amount to more than £2,000,000; the total amount to be (borrowed for advances to local authorities, settlers, workers, and mines is over three millions; we are to borrow a million to be expended in land settlement, and another lialf million to .be used in developing our waterpower. The grand total comes to more than six and α-half millions, and the amount is certainty large enough to provide food for reflection. We do not suggest that any of these loans are unnecessary or that the rnxinoy .will foe expended on undesirable objects. Our Puiblie Works system is the central feature of our national policy; the Advances to Settlere system has been so pronounced a success that a case for its extension to workers and to local bodies is, in our opinion, fully made out; and most people agree that something muet be done in 'the way of utilising our wasted water power. None of these things can foe done without borrowing, and the loans will 'be co applied that the expenditure will Ibe -to a very large extent reproductive, and must add directly or indirectly to the wealth of "the country. But, after we have granted all ithis, the fact remains that ■bhe total amount of our liabilities is large, that it is increasing rapidly, and that therefore it as incumbent upon the Premier and his colleagues to regulate the national expenditure with due forethought, care and economy in every department of the public administration.