NO CONFIDENCE

Evening Post, Volume CVI, Issue 5, 6 July 1928, Page 6

NO CONFIDENCE

: ♦ —- LABOUR AMENDMENT THE mTE OF INTEREST ADDRESS-IN-REPLY DEBATE The debate on the amendment o£ no-confidence moved by the Leader of tho Opposition (Mr. H. X Holland) was continued in the House of Representatives after "The Post" „ woiit to press yesterday. Mr. Hoi-," :.. land's amendment attacked the Go-, veriiinent for allegedly failing tti ■ provide - adequate .-financial :issista'uoo .for farmers and home- . builders, and for permitting its policy relating to the. Post Office. Savings Bank and the. State Advances Department to bo influenced by tho privately owned financial institutions to the dotrijnent of the whole Dominion. -In continuation of his speech, 'pa'it of which was reported in yesterday's "Post," Mr. Holland stated that oiv 31st December, 1925, within one month of its victory at, the. polls, and notwithstanding its promises to the farmer, the Government increased the interest rates charged by the State Advances Department, ... .... ..... i •/.Tho-Hon. W.NosTCOrthy (PostmasterGeneral) :"I believe you arc right." (Laughter.) "FIRST PLEA OP GUILTY." Mr. Holland: "That is Iho first plea of guilty wo have had, Mr. Speaker." The total amount invested in the State Advances Office up to 33st March, 1926, was & 28,316,333, and a number of those millions were obtained at 3 per cent. Tho average rate of interest at which the total was raised was- £4 6s 3d per cent. If they took into account tho profit made by tho Office since its inception, and up to 1920, the profit up to that time was certainly not less than £1,250,000. If they took that; profit into account, the cost of the whole of that money up to that time was round about £4 2s 7d per cent., so there was no need whatever for the Government to raise the interest rate on advances. In May, 1927, the associated, banks raised the rate of interest on overdrafts from 6} to 7 per cent. He thought it would be conceded that every V per cent, on the total interest bill of New Zealand meant about an adcli-' tional cost of £50,000 to tho farmers. While these'increases were being made they had to remember that Mr. William Watson, a director of the, Bank of New Zealand, had stated emphatically that tho resources of the bank'were quite sufficient to cope, with tho temporary excess of imports' without raising the rates of interest on advances. The overdraft rate had been increased, but the dividend and bonus on the capital invested were equal to 17 per cent, in 1926. What ho had narrated had been the first attack on the Post Office Savings Bank. ' , STATE COMPETITION. Sir George Elliot) said''Mr. Holland, had complained of the competition of State Departments, and as a result the Government definitely restricted its advances under the' State Advances Department, one of the most important of the Government Departments. That restriction was imposed almost immediately after Sir Georgo Elliot's statement. Thero had been a big drop in tho advances to workers from £2,549,----530 for tho year ending 31st-March to 1927, to £1,358,095 for the"year'eftd' ing 31st March, 1928. There were many workers who had been, waiting,for their advances for years. Much the same position obtained in regard to advances to settlers. Mr. Holland said that all tho figures in regard to rural advances had not been made available to members. The Prime Minister: "The. figures have been used by the Minister?' of finance and other members." •■:■ ... / Mr". Holland: "I don't care \vho has used them. They have not been mado available to me." Mr. Holland went on to say that thero had been a drop of nearly £1,500,000 in the amount of money advanced to settlers. Sir Georgo Elliot had stated that the Government should make higher charges for its advances, but on the other hand Professor Tocke'r. who was the "white hope" of the Conservative elements in New Zealand, had "stated that the remedy lay in lower .charges. T]he position in regard to tfce; operation ;6f the Rural Advances Act, 1926, was most unsatisfactory, particularly in reference to the issue of bonds. , The idea had been creatpd that the. country'was: not responsible/for the-li^bility arising from the issue of tho "bonds, and that had given'rise to a most unsatisfactory position. Sir George Elliot had stated that the Government was responsible for the. principal and interest on the bonds. Who was right? The Minister of Finance or Sir George Elliot? The Minister of Finance: "They're both right." (Laughter.) Mr. Holland said there seemed to be. a desire on the part of the .Government to make the country's liability appear as small as possible. He maintained that he had proved that the ■Government had failed to provido adequate finance for either the primary producers or tho. home-builders of the Dominion, that; it had allowed its policy: to be considerably influenced, to the detriment of the whole of the people of the Dominion, by the financial institutions— the privately owned financial institutions, that were more concerned about making huge profits, out of which, they paid,, high dividends, rather than be concerned; as social utilities in tho economic organisation of this country. Never before was the need for a State Bank more definitely demonstrated. ', Mr. E. J. Howard (Christchnrcfe South) seconded the amendment. ,;■ "SOME DEEP GONSPIEACY." | Tho Minister of Finance (tho Honl W. Downio Stewart) said that so far as he could make out from tho speech of the Leader of the Opposition Mr. Holj land had discovered some deep iconspir,;. acy between the' Welfare League, the: banks. Sir George Eliott, the Govern}; ment, and possibly Mr. W. J.. Poison1, of the Farmers' Union. There sodmed to bo some suggestion of a deep plot on tho part of the Government and the financial interests of tho Dominion to raise interest, refuse loans, restrict adf. yances, and generally run the finance? of the Dominion on unsatisfactory lines. ""■ The Minjstor said ho should have thought Mr. Holland would ha,v<j been veij careful in bis references tp financial questions, becauso ho (the Mitt':. istor) had not noticed ill those Domini-' ons whero Labour Governments ruled , that they had been very distinguished so far as the administration of their j finances was concerned. Hugo deficits J had'been a feature of their administraji tion. Mr. Stewart said ho thought the. administration in-New Zealand was one' of the last straws the Leader of the Op,--position should seize in his endeavour' to criticise on tho score of finance. 1 "Mr. Holland," said the Minister, "has been trying repeatedly to persuade tho' Houso and to persuade His Excellency that "the Reform Government no longer possesses tho confidence of the country', and. I am inclined to think it is a mattor of form and that he considers it is his duty to do so. I don't believe lie thinks ho has. much prospect qf carrying out his ambition." .' A Reform member: "And less reason.?. Proceeding to deal with Mr. Holland'^ reference, to-the raising of thoi£s,ooo,v;

000 loan, Mr. Stewart said that tho loan liiid been raised on excellent terms. It was necessary for tlic Cnvenimcnt njid its financial advisers to tatcli the London market very closely in.order to select tho most suitable time for floating the loan. The fact that the loan wan oversubscribed was, as Mr. Holland had said, a tribute to the good credit of New Zealand, and the fact, that # .it went to a premium a week or so later was no evidence that the Government had misjudged the market. The Govern; nicut could not be expected to gauge the market to the last penny, and Ms opinion was that the Government's estimate was extraordinarily accurate. He thought Mr. Holland should have. congratulated the Government on the miinuer in which it had floated the loan. SAVINGS' :BANK;:INTER£S2. Mr. Stowart denied that the reduction in the amount of. Post. Office' Savings BJniks deposits was brought about at the dictation of'■■.the banks, Sir Georgo Eliott, or anybody else. It was done because the Treasury and the Post Office realised that it was unwise to have such large amounts lying, to! the credit of depositors in tho Post ; Office Savings Bank; ,"■■ -.•"•- Mr. J. A. Lee (Auckland East): "They are lying in another bank," "' The, Minister:. "That has nothing- to do with us." ■ , : Mr. Hi. T. Armstrong (Christchurch East): "They get : the- choap money instead of. you." ■■ ; . _'■'•'' ;So far as what Mr. Holland had alleged had been, arranged between the Associated, Banks . and., . the" ' Wejf arc League,.the Minister■ said that ho was. not concerned .as to what '.vent on botween those institutions..- : . .' ... ■ Mr. Holland: "I only,quoted that to' show that the Welfare. League was asked•to conduct propaganda to influence the Government." , ... The Minister: "The ,hon. gentleman, is quite- entitled to, say. that, but.it is a of what the: Gov-j eminent, does..- If there are ■a. .half-a-dozen leagues clamouring for or against a certain line "of. action it has nothing to do with us,. I think that last, year, when I was in the midst of a big storm over the income tax, the member for Wellington. Central: was quoting \, the Welfare League in'denunciation of'my 11 action. He seemed to think that the" Welfare League was a very valuable! sourc of criticism of my.action." . 1 The Minister then replied to Mr. Hoi- i land's strictures .: regarding State Advances and Bural Advances, his remarks being reported elsewhere. Mr. W. A. Veitch (Wanganui) said that to continually look to the Treasury for everything would weaken the spirit of independence and increase political patronage.. . There had been no evidence of increased prosperity as the result of the Governments-greater borrowing. The land, settlement policy of the Government had not been a.success consid-. oring the amount of money borrowed. The Minister ,of Finance might submit that it was better to write £10,000,000.; off the Wai- Debt—the dead-weight debt —than the National- Debt, but the speaker maintained that it did not make ■qno penny of difference to the taxpayers, for it was simply a matter of adjustment between accounts. He professed deep concorn for the present financial arrangements of .the Domin- i ion, and said he believed the country could not reach its maximum production •until the financial system hao\ been pro-, perly organised. The Government's agrarian policy: had-failed because of the .cutting up of the land into, too small subdivisions and ■ weak and incomplete organisation, as well as tho fact that there was no institution to organise the financing of the producers. Ho condemned aggregation noar the railways' and distributing centres, and declared that some purchases of land by the Government demanded a much more satisfy- ■ ing explanation than had yet been given, particularly' in regard, to Te' Wera. Turning to industrial matters, Mr. Veiteh said. that the ultimate1 effect of tho high tariff wall against America would be that American manufacturers would establish their factories behind tho tariff wall, thus Americanising industry in the Dominion. He advocated a policy whereby the British capitalist would bo encouraged to invest money, in industries in New Zealand. It was useless trying to build up a large.population by encouraging immigration until there was sufficient employment in industry to absorb the extra numbers. Wo should consider New Zealand industries first, British next, and foreign after that. Progress had been hindered by the lask of good feeling and understanding between capital and labour. As a result of the coal strike in England in 1920, American exports of coal for the year jumped enormously, illustrating the loss- through industrial disturbance and the importance of preserving industrial peace.. Mr. Veitch maintained that the Eeform P»rty had not adhered to its policy of secular education, and, amidst laughter, said the country wanted a party which would adhere to its principles. (Bef orm laughter.) The Minister of Finance was not entitled to blame the war for the present severe financial stress, for over and above the war cost, the" Government had handled credit moneys amounting to considerably, more than £100,000,000. LIMITATIONS OF THE STATE. Tho Minister of Health (tho Hon. J. A. Young), replying to Mr. Veitch, commented on the tendency to look to the State to provide money, and said it was not possiblo for the State to find money for all purposes. The trouble was that private investors were not prepared to lend money for long terms, whej-eaß tho farmer could only repay his loan after a lengthy period of years. The vances Department was doing its best to lend as much as possible or developmental purposes. He maintained that it was better to wipe off the dead-weight debt than repay moneys expended on works which were earning interest. Mr. Young defended, the Government's land policy, and pointed out that the j farmers difficulties : were created by ■deflation 6s' values!- In regard to:iinem--ployment, the Minister placed on record tho views of Professor Copland as reported iv yesterday's "Post." Local industries had benefited considerably as the result of tho tariff preferences given ' to Great Britain last year. The Minister quoted figures with tho object of showing that Now Zealand's trade with Australia had greatly improved, and the balance was less in favour of Australia than it had been. He concluded by affirming that it was the aim of the Minister of Finance to so arrange tho finances of the Dominion that it would ultimately become unnecessary to borrow money outside the country. q M.u\ EI., J- H(wai'd (Christehurch South) said that he had listened to .nino speeches from the Throne, but he had never seen such a negative one as that delivered at the opening of the present session. ..He objected, to the othpr sidp of the "House getting away with the self-satislied smirk that because other countries had unemployment we should be prepared to put up with it here. ■ The Prime Ministor: "Oh, no; that is not correct.' Mr. Howard contended that the Minister of Finance had1 received orders to rescind the 1920 legislationMn respect to Post Office Savings Bank deposits. Mr. Stewart: "Oh, no." '■' A PREDICTION. Mr. Howard mentioned that unemployment'cycles were always arranged by those who manipulated tho credit machino of this country. Ho predicted that, within a few days tho, Fi nance Minister would announce a reduction of 1 per cent, in the rate of interest. "Of course, this is not election year, is it?" proceeded Mr. Howard, "No, it's a cycle." (Laughter.) .-: Interest always comos down in election year, but after tho election they had the cycle of a

slump again. 'Who -'manufactured slumps? Tho Associated Banks'? , A iicform member (satirically): *'The Itcform Party." . , "Yes," said Mr. Howard, "they have a leg-iu." In election year the "ins" always'hud bags'of money and promises to give away, and, of course, lie anticipated that we would be in for a much better time. '■ Mr. Howard objected, to the Prime Minister resorting .to propaganda in an article in a book? lot on rural finance. "The Massey. Collego is referred to," .said Mr. Howard. "The college is a magnificent piece of work; it cost £15,000, and they have eight students." (Laughter.) The speaker blamed-'the Government for bringing out large numbers, of immigrants in spite of the. warnings that the Labo'iir Party had given that a .'depression would follow the period of over-importing. ■ He disputed the statement" that. .'BO. per cent, of the iminii: grants had gone on the land. . ; ' The Minister of Lands^ (the Hon. A.. D. M?Leod) H"ow many havo gone onS" . '. "■.■■'"..■.•■' ■•Mr. Howard: '<! don't know, and I don't believe anyone in this House does." He asserted that, no reliance j could be placed on the Year Book figures, ■■; V~V";••■•,.: ■■ ' ■ ..'. .; : : . The Minister.of Lands;.'! You.can if you quote them right.''"■■•■■ ■ The speaker appealed to the Minister of Lands to: say what the position was in respect to land settlement. Hundreds of young men were anxious to get on the land, but they could not do so. Mr. M'Leod: "Hbw much money have they got?" ':.':• .... ■. ..•'■, . ' .■•; ■ That, said Mr. Howard,.brought them ,to tho position Bef oriu had landed them in. - Thoro.was: plenty of land and men starving for.'it,- but owing to Beform's "administration they could not1 get it. Discussing the, Samoah situation, Mr. Howard said that the main complaint of the natives Was in regard to German ordinance of 1901 in regard to copra, which the: New Zealand Government had .adopted. Ho deprecated a- letter frbm one of the police sent'to Samoa which had been, published in- New Zealahdi and said' he;h^ od'the-writer had been, called to account. He maintained that in iivo ■ years' time: Mr. Nelson would walk back : successfully into Samoa after1' the .present "Party.'had gone out of office INSXntANOE INVESTIGATIONS. Mr. J. Mason (Napier) T said there were moil on the Kef orm side of the House who were just a,s anxious as the. Labour Party to find a solution of the' unemployment difficulty. The amount being- received by the,' unemployed on relief works was greater than that which they would get under an insurance scheme, although he fully believed that the merits of unemployment insurance schemes should be investigated. Tho Government could not bo blamed for bringing out immigrants, as they were iv the majority of cases nomin-, atod by others who'had cputo out and* settled down. The nomination, of immigrants, ho'considered, should1 be done, through tho Labour Department, which should find out how prospective immigrants were to be absorbed in the twelve months after their arrival. ■ The attitude of, the' Labour Party in regard to Samoa was very difficult to understand, but the report of the Koyal Commission proved that' tho Administration was sound and.that the difficulty which had occurred was due tp the Hon. O. '■¥': Nelson and those associated.with him- The only nieans of getting rid of the trouble was to attack its source, and it had been got rid of by deportation, which was nothing new in Samoa. ' . - 1 MivH. Atmore (Nelson): "It is something new to Magna, Charta, though.?' Were tho people of the Dominion. going to accept the findings of the Boyal, ■Commission, 'he. asked, or the biassed 1 expressions df-tH'ti.Labour^ Patty,'made for political rjurpose3?;, ; M,r. Masdn ask T <eel what Government HadI'ever provided such assistance for the, small farfnor as the present Government, and also de-' fended the Government in the matter of home-building. The Government had liberalised advances to workors, as was sufficiently illustrated in the Hutt Valley. ' . ! • ' ■ . The debate was; adjourned, at 11.30 p.m. on tho motion of the Hon. J), Buddo (Kaiapoi)^___ i| = i< v^ j - |i^|>^ ;