THE FINANCIAL POSITION.

Press, Volume LII, Issue 15489, 17 January 1916, Page 6

THE FINANCIAL POSITION.

■ o ■ LOANS AND THE MONEYS MARKET.

SIK JOSEPH WARD'S YIE^V.

On .Saturday a Tress Association ' ; telegram from Wellington summarised a statement, by Sir J. G. "Ward coh-. crrning tho national finances and tha outlook. For some reason the most interesting portions of Sir Joseph ' Ward's statement were omitted by %".?• Press Association, and wo supply them -

After referring to the. details of pub-• lie works expenditure, the Minister' said

"The estimated expenditure ud to * March 31st next, under all headings— _ railway construction, public buildings, harbour defences, and the construction 1 and maintenance and supervision of' roads and bridges and other publicworks—is £'455,400, and tho estimated' - ' expenditure from the end of March next to December 31st, 1010 is x £1,051,000. lam therefore in a posi- • tion to be able to state definitely that wo shall not require' to borrow any*-' further sums for public works expenditure until well on in tho year, 1917. This, I think, ought to be* gratifying to the country generally, and reassuring as to tho position we are likely to occupy after tho oonda*** sion of tho war. I want to say, as I havo said before, that it is the time after the war for which tho country - must now prepare, so that wo b:> able to meet tho now conditions < that must arise without any great mtornal dislocation of tho public' financo. '

"To enable this position to WVI further strengthened, all 4 nor cent*?! debentures payable locally falling ' up to 1924 will, if the holders apply I ,*; to the Treasury, bo converted into per cent, debentures, with a curroncy l ' extending to twenty-fivo years, and' the new debentures will bo free from income tax. I may say that the ob-;| ject in doing this is to avoid to make provision by local loans , tho repayment of the debentures cur-.-Ji rent and falling due in tho respective,-* years between now and 1924, so that® the Minister of Finance may bo in ts3 position, if circumstances necessitate local borrowing lato in 1917, to what is required for general purposes' 0 without having to borrow funthcr for '■£. tho repayment of tlieso debentures.'l';'/. think that those who understand tho:-. financial responsibilities under the con-i j ditions that exist • consequent upon;&j this practically world-wide war will ' cognise that this is a judicioas-coursdi »■:; to follow, and that it will givo added strength to .the financial position of'r the country for whatever may bo quired of it after the war. is over;-'/: This, of course, applies equally to tho- ; j : conditions that would exist if tho war<;i should continue for a longer periodgfe than most of us hopo will bo the casoj-Vt. "So far as the war loan for New Zealand is concerned, I ams| glad to be able to say that this is do- ygi finitely fixed until the end of Decern-;*™ uer. J. 916. Provision has been motto, foi. tho amount of £8,340,000. over monthly payments for tbis;pu> pose. The wholo amount cornea,, from. London, thioufh the British ment. It is well to' know that the J financial arrangements for another yoaraH have, been definitely made, and Mm should ho regarded r a» highly satisfacag tory by all those who 1 realise' the poai-® tion of a young country with a limited® 1 population. There iB little doubt, my opinion, that if we had to raw® such a sum as this locally ' it woul§|g alter the whole local money market .mOS an extent that would be, to. say toftx! least, more than embarrassing tor classes who require the' use of Mr-til rowed "moneys to enable them to cai?J[<3B on their businesses, whether in towjyi or countiy." , ~ .-rim Sir Joseph Ward concluded his sta#Mg •ment -by saying that thero earthly reason why the rate of intoresJ|| should go up in this country. Anv-s one attempting to raise it during thtfjl present war crisis would not be loofcgffjg upon as a friend of either tho countMi or the people. There was plenty,*#® money in Now Zealand, and the obj*s|H of every well-wisher of tho. in a time when war was raging sliouloSS be to keep the general finance,of tsg| country, both public ina pnvatgsg steady. Ho had bo far refused to. authority to local public bodies to rajggl moneys at hifpi rates of interest, it was in their interest as well asMi that of tho people they served in tb«M respective localities, that rates shoogg not be allowed to run up. The Gtoveflgg ment had the -power under statutes® last session to prevent an incrcaMj| rates of interest, and, though ho Ml averse to exercising powers of the kin?! if there were any .attempt to.forcofj® tho value of money at such a this, tlien it would be a question j®| serious consideration as to whethcrjWft power should not be put into One of tho Wellington paper?, commenting on the statement, W»§?|| the Minister how he roconcilcd the ing of the rate of interest by tho Suwßg in the price it. is paying for its lo®®® with'Jtis subsequent declaration TrraSjj there is no earthly reason why •tho'/flyHjg of interest should 50 up in this try," and his' warning against anfegaß tempt to force up the value of monggaaj To this criticism Sir Joseph replied that ho did not consider tho conversion of State loans ims|iM per cent, stock (as per his stateni«Hl was raising the price of money in:jfgaH Zealand, in view of the fact thatawm had recently borrowed locally at cent, free of incomo tax. His Wftrn*!Kjg against any attempt to force up. ; 3lw value of nioney was given l>ecau«S|Bß tho fact that within his own JpowufljßH an attempt was being made in cojtgffl quarters to do so. It was netUJi» dtfirablo nor necessary that thisJga . tempt should bo made. If such a tnjHjH came about it might mean Zealand would have to give a great,«ga| more than 4J per cent, within itejOgHffl borders for money, and that would yjigg quickly afreet every class of borroK|B| in the community.