NATIONAL FINANCE.

Press, Volume LI, Issue 15174, 12 January 1915, Page 3

NATIONAL FINANCE.

TO THE EDITOR OF "THK PRESS."

Sir,—T» his article on "The Effects ol' the War," in "The Press" , on Janu--ary 2nd, Mr Cunliffe says, "What with the debt of tho local bodies, and private companies and individuals, added to our public debt, we must pay to our foreign creditors as interest,, somewhere about £3,000,000 .annually. This is paid by an excess of exports over imports." Now-; taking the five years 1909-1913, the average excess of our exports over our imports, including specie, -was only just over £2,000,000 a year. On tho other hand, the. New Zealand "Year Book'for 1914 says: "The total amount of public debt outstanding at the end I of March last -was £U».730,497," and "the total amount of interest payable to bondholders on the full amount as quoted above is £3.812,570, jvhich "ives an average rate of £3 16s 5d per £100.'' -Rut there are local bodies debts, not included' hi the above "total" (as they ought to be).'which amounted on March 31st, 1913, to. £17.483,332; the interest was LiSi,BJ7, the average interest being £4 10s'2d per cent. (The last year's increase to March, 1914. is not included, as it ought to have been). So, tho real total <>f public indebtedness, therefore, last March 31st, was over £117.000,000. of which over £90,000.000 is sEown to be foreign "capital. The total interest is over £4,600,000, of which over ! £3,500,000 must be paid to our foreign creditors. Then our registered mort- ! gages are now over £10U,()00,000, but i the Year Book does not state (as it ought to) how much of this is foreign capital. Probably not less than half is foreign capital, and the interest upon : it not less than £2,500,000. »So. without reckoning the dividends and profits of banking, mining, commercial, and other foreign shareholders, wo must have over £6,000,000 a year to ' pay in interest abroad. The £2,000,000 '. a year excess of exports over imports, specie included, will not pay £6.000,- ---'. 000. How do the foreign capitalists get [ their interest? The public indebtedness i of New Zealand dnring the five years , 19C9-1914 has increased by over , £18,500.000. IF -about £16,000,000. of this is foreign money, how did wo get \ it? The registered mortgages of New J Zealand have increased in the last year

alone by over £8,500.000. If halt that capital "is foreign capitat, bow did wo ret it? Does this country pay interest out of loans? Or, how do we got the foreign capital?— Yours, etc., J. 3IILES VERRALL. Swannanoa, January 9th.