THE HALF-MILLION MUDDLE.

Press, Volume L, Issue 8651, 28 November 1893, Page 4

THE HALF-MILLION MUDDLE.

The Lyttelton Time* has come forward valiantly in defence of the Colonial Treasurer's lamentable blundering over

the half-million conversion. If Mr. Ward and our contemporary are correct, then every. previous Treasurer, the Audit Department, and the Treasury officials have for years been issuing false statements as to the public debt. Mr. "Ward himself has also, on the same assumption, issued an untruthful account cf the position of the Dublic debt, in the tables attached to the Financial Statement. In these tables we have the gross and n_ t debt given, and the net debt is arrived at by deductiug the accrued sinking fnud from the gros3 amount outstanding. Following the same method and assuming that the £500,000 loan and its sinking funds were the only loan to deal with, the position before the conversion would have been as follows :— Outstanding debt £500,000 J_)ebenture3 under Consolidated Stock Act, 18S. 96,000 596,000 Less accrued sinking fund ... 256,000 Net debt ... ... ... £340,000 The above table is constructed in precisely the same way as the table attached to Mr. Ward's Financial Statement, which shows the gross debt in March 31st last as £39,257,840, and the accrued sinking funds £1,113,770, leaving the net debt as £38,144,070. * In the case under discussion— The neb debt before conversion was ... ... ... £340,000 Since conversion it is ... ... 610,000 Showing an increase in the indebtedness of the colony of £270,000 Take another illustration. Let us suppose a man has borrowei £500 from a building society, repayable ou building society conditions, namely, that a certain proportion of the principal should be repaid annually in addition to interest. Assume that the payments have gone on till the building society have £250 iv baud towards the redemption of the principal. Is it not a fact that- at this stage the borrower only owes £250? If he is in need of money for other purposes, and decides to pay off the society at once, but to do so has to give a mortgage on his property for £600, iv return for the £500 cash advanced, has he not increased his debt by £350. True, be has the £250 to spend in any manner he pleases, bub since he has raised a mortgage of £600, when his neb debb was only £250, it is worse than idle to pretend that the paying off of the £500 by giving a new mortgage is nob increasing bis neb indebtedness. And so with the Government in the case under notice. The gross debt, as shown above, was £596,000, towards the payment of which a sinking fund of £256,000 had accumulated, so that the net debb was only £340,000, By the issue of the £610,000 new debentures, against which there is no outstanding sinking fund, the Government have increased tbe neb indebtedness of the colony with respect to the loan by £270,000. It is perfectly useless for the Government organ to endeavour to make out that this is nob the case. We can only come to one. conclusion, in connection with this matter, namely that a deliberate attempt is being made to mislead the public by putting forward a confused mass of figures in order to hide the disgraceful mismanagement of the Colonial Treasurer. A Government and a party capable of thus attempting to deceive the public, are unworthy of the trust of the people of New Zealand.