BORROW AND REPAY

Evening Post, Volume CXVIII, Issue 8, 10 July 1934, Page 5

BORROW AND REPAY

VOGEL'S PLAN—AMENDED

Inflation las teen described at being like fire—"a good servant but a bad master." Its records of mastery are better known than its records Of service. , ' ■ ■ Inflation is of various kinds, but nearly every kind of inflation is due to departure from initial plants. Borrowing inflation begins when repayment is jettisoned. > ,' .' Sir Julius Vogel, like President Boosevelt, gave the people of his day hope. When it was urgent that something should be done, Vogel did something. And the something he planned was not quite the thing that resulted. "Progress" writes in the "New Zealand Eailways Magazine," concerning the Public Works policy of the early . seventies: "Vogel was a sound • and cautious financier,- and his policy was not one of reckless borrowing, as is so generally thought today. He proposed that the loans should be hedged in with many restrictions, and repaid' through ample sinking fund.provisions. He also suggested that the proceeds of the land sales and of the increased ' revenue that would follow his development policy, should be allocated to the* reduction or repayment of loans. The people, however, although they accepted his borrowing policy with acclamation, rejected his repayment provisions, with silent enthusiasm. Vogel created, in fact, a Frankenstein monster that overwhelmed its creator, and when he emerged, breathless, amazed, and shaken, from the riot, he retired philosophically to the bath chair that his gottt necessii tated, and suggested nothing more evef after." In 1870 the population of New Zea< land "had reached 250,000j but tho . communities were still sparsely scattered through the fertile lowlands, separated by great distances (reckoned in journey time), by racial characteristics, and, more disruptive still, by provincial jealousies. Vogel (for the first time) visioned the colonists as a united people, and discerned the truth that a debt of £40 per head of population would, if wisely .spent and sternly redeemed, prove not a wild speculation, but a wise. movement, is vision.was only in part fulfilled. His policy did make for unity—for the first time in our history, every province, town, and hamlet was nnited —everybody .was firmly linked by three ideas, the first to borrow al the money possible,' tho second to spend as much of this as "pos» sible on railways in. his. own district, the third to have nothing ; to : do,with sinking funds or repayment schemes." Even so, is there anything in Vogelism equal to the derelict railway in Hawke's Bay?

Tel. 41-972.