"A Little Arithmetic."

Press, Volume L, Issue 14970, 18 May 1914, Page 6

"A Little Arithmetic."

Arithmetic, as most people, and particularly tho people of Canterbury, are now well aware, is not the anti-Reform apologists' strong point. As often as not they present false figures to their readers as tho official figures. When their case requires that tho rise in taxation per head under tho Massey Government, should appear to be greater than tho large rise under the "Liberal" Administrations, they coolly attribute to the Reformers' responsibility for so much of tho increase under "Liberalism" as will suit their argument. When it is a question of comparing tho riso in revenuo or expenditure, they think nothing of adding on or taking off a quarter of a million from tho correct total. But even more often they blunder through sheer inability either to realiso the value and the necessity of exactness or to understand the business of plain calculation. An excellent example of Opposition financial arithmetic is afforded by an article which is given a prominent place in that singular publication, tho "New " Zealand Liberal." The object of the article is to show that tne foolish and costly policy of short-dated loans is preferable to the policy of long-term loans. This it seeks to prove by a sum which is represented as illustrating

something like the actual facts in connexion with the short-term loans raised by Sir J. G. Ward and Mr Myers. Tho demonstration is as follows: —

Fo-nr years a_i 1 borrowed 8 millions at 5 per ci'nt. I pay—

Brokcrajrc (say -2. Ncr cent.) .. £200,000 Five per cent, for four years .. £3_0,0-0 Now _-- money is easier, I convert it into a 30 ye_rs' loin al 4 per cent. It has coet me— B_oksra_? '.twice. -- .. £-00,-00 Four Tears at 5 per cent. .. Xo-0.000 Thirty" yea:_ at 1 pc- cent. .. £-,000,000 Totsl .. •- •• £10,3.0.000 Suppose I had borrowed for thirty yeu:3 ■vrh.n money iv-_( at h per cent. I would . 3 J" — Brokerage- 3? above .. .. £-00,000 Thirty year., at 5 per cent. .. £1_.000,000 To.a! £_-.200,C00 The actual arithmetic happens this timo to bo correctly worked out, but the premises are, of course, absurdly wrong. In the first place, if the money which for a short term cost 5 per cent, had been borrowed for thirty years, it might have been got for 1 per cent, ln that case, allowinc the calculator his own brokerage rate, the interest for thirty years would havo been I'O.GOO.OCO, apart from £200,000 brokerage, or £9,800,000 altogether. Under the short-term method tne cost would have been £10,320,000. J. a matter of fact, the more important of thi-short-term loans actually in contro-

versy cost over 5 per cent., and it was only by accident that on the date of renewal tlie market was nofc as difficult as the events of 1912-13 showed that it might be at any time. -Any "Liberal," by making suitable assumptions, can arrive at any result for any "little "problem"' he may set himself; it suitable assumptions cannot bo made he can do as tho Opposition Press has often done, and invent any figures that may be required. It need hardly bo said that tho public is not so foolish, so indifferent to facts, and no ready to believe one "Liberal" story one day and a conflicting "Liberal" story on tho next day, ae. our anti-Keforni friends imagine. Tho plain man learns in his daily life to respect facts and realities; ho owes his continued existence to his respect for facts and realities. Why the "Liberals" should fancy that he cares nothing for facts and realities in politics is one of the mysteries of the day. But it is a fancy which will be very rudely dispelled by the general election.