A withdrawal.

Press, Volume LXV, Issue 19691, 7 August 1929, Page 10

A withdrawal.

borrowing embargo PRIME MINISTER ADMITS MISTAKE. LIVELY MOMENTS IN THE HOUSE. [THE PBBSS Special Service.] WELLINGTON, August 6. An admission that he had made a mistake in stating that New Zealand had been prevented from borrowing on tlio London money market for two vears was made by the Prime Minister (Sir Joseph Ward) in the House of Representatives to-day. There were some lively interjections while the Prime Minister was making his amends, and the matter received further ventilation at night during the course of the Financial Debate speech of the late Minister for Finance (the Hon. Mr Downie Stewart), whose negotiations were alleged to have been responsible for the embargo. The subject was in the first instance raised by the Leader of the Opposition, Mr Coates, who reminded the Prime Minister of his promise to make a statement to the House concerning the alleged two years' embargo on New Zealand borrowing on the London money market. The Prime Minister intimated that he would make a statement during the afternoon, and at a later stage he was given permission to do so. "The position is that when I came into office the first thing I found was the very important documents dealing with my predecessor's negotiations with London and calling for urgent decision regarding borrowing and conversions," said the Prime Minister. "These papers, I found, laid down London proposals to borrow the following years's requirements in the then year. The acceptance of this meant no borrowing on the London market during 1929-1930, and I had immediately to take up the matter, as it had been left without decision by my predecessor. The Treasury was anxious for prompt action in a matter that had been waiting for over two months, and it will he realised that personally 1 had little time to go into the minute details of these very complicated transactions. I did realise this, however, that coming into office after carrying a policy at the election for extended borrowing, I was much concerned at the position, which was a change from the usual loan per annum, and I had to set about getting the best conditions to fit in with my poliey. "I agreed to the conditions, provided the new money was increased to cover what I considered my policy required, and also a large amount for conversion purposes," continued the Prime Minister. "I mistakenly concluded that it meant a longer period of abstention in London than on a personal perusal I frankly admit I now find to be the case. I took the reference in the reports to me as applying to the two calendar years. 1929 and 1930, whereas the actual period covered by my predecessor would not exceed eighteen months—that is from January 1929, to the usual month in 1930, that is. May. A close review of the complete file shows this to have been actually the position when my predecessor left office, and he was correct in challenging my statement as to the two financial years. I was not excluded from borrowing on the London market for two years, but for 18 months, according to the official file in the Treasury. I gave two years to the House under the strong impression that I was sure of my facts," added the Prime Minister "1929-30 is not two years in actual length of time; it is 18 months, and I had for the first time iq my own history as Minister for Finance to agree to a second loan t>o be raised in the same year It is a most unusual procedure, and one I have never known previously in connexion with the finances of this country Had it not been for the fact that the local money market turned favourablv toward providing money for State advances, we could not have obtained the money in London after we came into office, not even after a double loan in one year, and I was thrown back upon other resources to obtain the money for the State Advances Department. I was offered C 2.000.000 from another country, but 1 refused it, preferring to rely on the local market. I have given th® facts, and I do the ex-Min-ister for Finance the credit of saying he was right in challenging my statement that I was precluded for two years from going on the London market. I was, however, right in saying that I was precluded for 18 months. Mr Coates: By whom? The Prime Minister: By the decision of my predecessor. Mr Dowme Stewart : I made no decision. Mr Coates: None at all. The Prime Minister: The ex-Minis-ter for Finance. Mr Downie Stewart: I left it over. Mr Coates (to the Prime Minister): Why not apologise? Be fair. The Prime Minister: You know nothing about it. Mr Coates (heatedly): I know you are dodging about it Mr Speaker (sternly): Order! Order! There was further interjection, and Mr Speaker 'nterFened with the statement that an argument was developing. He asked the Leader of the Opposition to refrain from interjecting and to reserve his comments for the debate on the Financial Statement. The Prime Minister thanked Mr Speaker for his intervention. "I am very much obliged to vou. sir. for protecting me," he said. "I am not accustomed to such vicious attacks. The late Minister for Finance says he left the course quite clear for me I want to say he negotiated for £5.000,000." Mr Downie Stewart: I did not The Prime Minister: When I caroe in the negotiations were "under way. ind were partly completed. Mr Speaker suggested that the disputed points could be contested during f he debate. The Prime Minister: All I want to 18 fcn© negotiations were partly competed. It was a conversion operation for part of the loans falling due I had to take up the position where it was left. Mr Downie Stewart: I will deal with that to-night. f Reform member ni r J! e , ttie Pfime Minister): Play the game! Mr Speaker: Order! Order!