THE WAR LOAN

Dominion, Volume 8, Issue 2502, 1 July 1915, Page 4

THE WAR LOAN

The debate on tho War Loan Bill in the House of Representatives yesterday was in 'the main worthy of Parliament and of the critical times through which we are passing. Some contentious points were raised by the Leader of the Opposition and one or two of his followers, but in a marked spirit of moderation. , Excellent in general tone the debate was a pleasant variation from others that will be remembered in past sessions, and it afforded satisfactory evidence that members on both sides of the House are seeking to sink party differences while the stress of war continues. It is to be said for the Opposition that their broad attitude was one of perfect willingness to vote all the money necessary to enable New Zealand to do its full part in the war. Such differences of opinion as appeared related solely to the methods by which this common end might be best accomplished. The Minister of Finance asked for authority to ntiße a sum of ten millions. The greater part is required to provide "for war expenditure at' the rate of about £350,000 a month up to the end of next June, but the loan will also cover war outlay already made from April last. . Provision is made for the redemption of £800,000 worth of Reserve Fund securities which have been pledged against expenditure, and when all current and anticipated calls have been met the loan will provide a margin of borrowing power to the amount of £1,000,000. This is intended to cover expenditure upon additional forces or any other war expenditure not now foreseen. Taking account of the war loan of £2,000,000 already raised, the Government is taking authority to borrow a total amount of twelve millions (the actual outlay may be less) for war expenditure up to the end of June next. Immense as this total is, the proposals of the Loan Bill cannot be called extravagant. Apart from the margin of £1,000,000, it simply means that the Dominion, through its representatives in Parliament, is making the necessary provision to maintain its forces in the field and train and send out reinforcements at the present rate during the next twelve months, if the war should last so long. The annual burden now being incurred will be felt for many years to come. Mr.. Allen stated yesterday that interest and sinking fund payments (the latter at one per cent., to pay off the loan in 41 years) would amount by March 31 next to about £330,000 per annum. If the war and the expenditure continue, the annual liability l.will, of course,' be correspondingly' increased. Sir Joseph Ward's contention that it would .have been a better course to take authorities for six months' war expenditure, and summon Parliament again at the end of that time if .necessary, would entail needless expense—the cost of calling Parliament together to grant an authority six months hence which it is quite justified in granting now. So long as the war continues, New Zealand is bound to do its part, and the Loan Bill which the House passed yesterday makes financial provision accordingly. It is true that in ordinary circumstances a New Zealand Loan Bill for £10,000,000, exclusive of borrowing for public works and other standing necessities, would be a glaring example of extravagance. But the circumstances are not ordinary, and no charge of extravagance is to be laid against a country which is freely expending its means in a just and necessary war. In so far as it has a practical bearing, the Opposition Leader's objection is fully met the fact that, apart from any money raised locally, the War Loan will be raised in instalments as it is required, and in all likelihood with the direct assistance of the Imperial Government (as in the case of the previous War Loan) at a standard Imperial rate of interest. No great attention need be paid to tho more or less formal and routine criticisms levelled by the Opposition at tho increased'scope sought and obtained by the Government in the issue of Treasury bills and the matter of unauthorised expenditure. The increases are obviously abnormal, and only to be justified by the abnormal times. When the war is over it will be the duty of Parliament to overhaul this section of the financial machinery of the country with special care, and restore it' as far as possible to its pre-war condition. Scope and freedom that are necessary to efficiency and smooth working in time of wa'r would in time of peace be a direct incentive to extravagance.