FINANCE.

Dominion, Volume 1, Issue 157, 27 March 1908, Page 9

FINANCE.

PRIME' MINISTER'S BPEECH. REPLY TO CRITICISM! [nv .'cojieespokbekt.] ■ Auckland) March 26. Ill,tlio course of his speech last night the Primo'Minister, mado 'some rcferenco to criticisms of tho. Government's finance, which have appeared in Tub Dominion. . Ho'said; It is a very extraordinary thing, but,it is nevertheless triio,.that,tliero seems to.be an effort to cast doubt-on, tho fiiiancinl stability, of tho colony. Our rcvcuuo upon March 31 this year is tho highest on re-, cofd;'approaching . nearly £9,000,000 sterling.' Tho position is unprecedented in the financial history of tho country. Allien I mado a similar statement recently tlip journal which is tho mouthpieco of the Opposition,' published in; Wellington, figuratively-speak-' ing shrieked-itself hoarso in its attempt tO : undervalue tho strong financial position- that thocountry. occupies, and it continuously urges that I should .preach blue funk to. tho people tit:the present'juncture.This, all in the faco:of, tho fact that our financial .position is a strong one, And that in tho llousO and outside of tho House I havo strongly re-? sist-ed and. refused to yield to the demands of both the Opposition and Government members to give effect'to a policy of largely ill.creased public works, aiid I have not at any timo urged. Upon tho peoplo a course or Wild or extravagant public-expenditure. -

TH&: AMERICAN, PANIC. !. :.- What I did say recently, in View, of 'tho financial panio, that swept over America, was that . this country,, fortunately,' Was -ill a strong financial position, - aiul. t!lat_ wo wero not: affected by tho. Amerioan panic.. That '.being,so,.,had Idono otherwise,. ! should have shown the same want of . moral t courage that is.,tho distinguishing characteristic of tllooe -who ni'o using the leading. .columns: of the Opposition newspaper In Wellington to underrate our financial strength and so try and bring about a condition of,funk and real injury: to country, ,At tho present juncture I liavo noither preached nor advocated indifference ... or want of prudence. .While'upon.'.this' matter, let 'me say, a Word in respect, to. the renewal and . conversion operations-. Of. tho country ..during . tho lastthroe years, as well as tho position of tho same .for the .next-two years.

IMPORTANT FINANCIAL OPERATIONS

• A leading citizen of Wellington, who at one, timo was in the-politics -of the country, lias expressed plarm in itho Dominion'newspaper (which-1 notico .has, been telegraphed throughout .the country),. regarding our renewal and Conversion operations, and' likewise. Wanted to know why, in'recent tinies, money lifts been borrowed at 4 percent. instead of 3J- per cent'. It is duo to .the public that I should give them-ail insight into tho position regarding this important financial operation.it'am very glad to say that all-theso opera-,-■tions havo been,.attended, to .long before the time of their falling due, and if, as Minister for finance, had, to wait for_criticisms of our opponents' in dealing with'these great financial Operations of the country, I airt afraid that the country itself Would very soon' ■be ...-. in a financial'- mess: An idea is,.,sought to be conveyed .by sonio-of our ■Ojiponcnt-S; that tlio Government is raising: to the upsetting- of the avenues of- Ordinary trade, and the - Opposition' mouthpiece ' published in Wellington went, so far as had raised the'-rates of: interest in the Post Office Sav-' ings' Bank.; Thisis not correct, as I'have.ilohe noth'in'g'.of the kind. Now, or the £2,000,0.00 'authorised for publio- works during tlio last. t.Woy.earsi £1)111,500 was' obtained ffpiji Aus-. ..tralia,' and{ afurther sum of - £600,000 •' was• also obtained -I'raiii Australia forliaiids- for Settlement and Railway Improvements poses,-under the Acts authorising the raising' l of the: loans fof. same. Wo aro raising portions in the Dominion, but not by any: means all."' Noi^'lct'ihe, that tlio amount of the„dep6sits Til' all the banks trading ill tlio Dominion, in. December, • 1904, three years ago, Was £17,524,386, and ■■in -December;: :1907'j. -£20,'7S7jSOli -Tlio Amount iii'the banks not bearing, int6i'd6t v on December, 1904, was £8,425,376.; on- Decern.bfcr, 19.07) £11,130,008: ~

OTHER CAUSES. . • ',; V; Those who. arc. ittdnlging*-iiii such : free- briticism against: the Government,' when I repeat tho public finances to-day : are. in a stronger position than thejr- liUVe' ever beeft in the history Of tho Dominion, should look round for other causes than those t-hoy havo - been good enough to state are responsible for any increase in the Value' of money.'- For iilstahee, they. should aScertairi what, amount or the people's , money lodged in the bankS;is' ; being used 'outside/Of the, London, or in' Australia. i Some.of !our. .finanV. Oial ■ institutions arp utilising "more .money, irt New, Zealand than tlley receive -from'tho, depositors in Now Zealand. -Some of them are,not;,now doing so. 1 airi not. putting' myself in .the position'Of a fault-finding critic. I 'am. dealing with some of -the imputations made; against tho Government which lire not. ■warranted., I attach \tho utmost importance, to keeping the' financial' nvenitcs .wiihiii our country wide .open; for the u6o of our owii peoplo's money for'business, industrial, and other purposes, and' tho aspcct of uny interfureilee.with tho natural -flow of-ouivtiado in tho country,necessarily is.not .escaping my atteiitiOh,' for,the reason that-it is my.bllSt : litssf in tho. positiou-I ihold ,to do all in my, 'fiower- to keep, not only tho publio:-finances' 'which-arc'a. first consideration to hie,- strong and sound,. but' also to do'what is reasonable and possible to ;help those coll trolling fiimn-ciarillstitntiOiis,-!alid mak'o the general fifraii-' cial position. 1 of .the .country' as. a 'w.liole,' out-' sitlo of,.tho'Government's-finances, easy, and 6afe. and. strong. I- hope I. ..lmvo. clearly shown'th'at. this . idea, , whieh is being "industriously ' eiroulated) that the • Goi'eliimqnt ■: is •—to use the term--" scooping :up all- tho available -.moneys ill Now Zealand, is/llot warranted' by' the facts. that :,I have just eiven. I have shown thajt w'o have obtained of- Our publie '.moneys froiii. Australia ,w'ithin'.the, last two years, and- that:during the last two years the .deposits' of our :OWU -people-in. the banking institutions of tile country have increased by £3.260,000. . .. ANOTHER QUESTION. Now, one - other word in connection with Mr. Duthie's criticism. Bo .asks why we are giving 4 per eent. for "loans-matead of per'cent.'' My answer to that is because the; net ; financial result to the country-is Very., much , better. tliAn at the, 3i per cent. lie. suggests., To have raised 'our money at; 3i per cent, would havo. meant a ..very heavy discount, and we obtained up.to 2 per OOlit. beyond par for portions Of our loans by tho course wo have'followed.' I; do. not think, even if it were to make Mr. Diithie happy by, talcing his advice, that -I wOliUl bft Warranted in making such a heavy 'loss to tho Country. Tho .'people Of ' New Zealand' may depend; that when successful financial operations to the country can be.carried out at 3i •per cent, that no one will bo nioro desirous of v availing. himself' of it. than I. will. Mr. .Duthio. iii his letter of March .17, shows that: the >two. issues in London w'hre issued at an unsatisfactory discount, and, if I w-erfe to follow the advieo lie tenders'now, I am qllito satisfied that a like fate would liaVo ensued.I presume -it will be admitted, even by my critics, that I mnst havo hotter general knowledge of the financial position, at least for public requirements, in tile Old Country, than those who aro criticising mo can possibly have. I aiiv not -egotistical enough to discount their ability or capacity, but it must bo recognised that ill-tho very heavy responsibilities- attaching 'to the position I hold it is my' bounden duty to keep myself well posted- aild Well Jllforniod, and if other evience is wanted of that, look at tho. position in' connection with the American crisis that I took up'. Early in December last I indicated'that by tho end of March tho moiiey in London Would ,bo comparatively plentiful and at a low rate of interest-. The Opposition 'moutlipicco at Wellington jeered at and i'irtually scoll'cd. at. my prediction, and what is the result? The money, which touched 7 per-cent. ill Loudon, is now down to 3 per Cent. I did not lnako tho statement ill question -lightly.: I niado-it-thoughtfully, nlid was quite open to be told by some of . tho critics if -the .prediction I-made jiad turned out to -be incorrect that I. did hot know ,what' I was talking about. '-However, the boot is on the other leg.