The Gisborne Times PUBLISHED DAILY . SATURDAY, NOVEMBER 10. 1928. THAT UNSUPPORTED CLAIM

Gisborne Times, Volume LXVIII, Issue 10740, 10 November 1928, Page 4

The Gisborne Times PUBLISHED DAILY . SATURDAY, NOVEMBER 10. 1928. THAT UNSUPPORTED CLAIM

The great majority of the electors must he amazed to find that the United Party leader persists in advocating his fantastic borrowing scheme .and that his henchmen continue to re-echo hia • claim that £70,000,000, could, within the next eight or ten years, he raised — £60,000,000 for State advances, and £10,000,000 for railway works—without involving the taxpayers in a single sixpence of expense. If the Dominion were allowed to borrow £60,000,000 more within only a few years' to assist the Advances Department—leaving out of consideration its further monetary needs for public works such as the completion, of the hydroelectric schemes, road works, schools,. telegraph and telephone extensions, public buildings, etc;, as well as the £10,000,000 for railway works —is it true, as Sir J. Ward says, that the taxpayer would be at no loss? On such a matter there could bo no better , authority than the V present Minister for Finance. The Hon.: Dhwnie Stewart says, in .the first plaice,that,'the- investors at Horne would not now agree to lend - a huge sum to any’ Dominion for the-purpose of being re-lent. In dealing "with the subject of borrowbo made this comment in ; the

■House last, year: “It is.well known that the people lin. Great Britain have indicated that they think. that money required , for. State. Advances should not he borrowed in London. They made it pretty, clear, to tho late Mr, Massey and .since then • it has also been indicated that, in their opinion, loans raised in London should be used on what they Consider development works such as hydro-electric scheme*, railways, and so on.” In theN second place, the Minister for Finance says and no financial expert has dared to * contradict him that moneys raised on the basis of an issue price of £95 with interest at 4-J- per cent., would, if they were re-lent at 4£ per cent., as is-proposed by Sir Joseph Ward, result in.a 'heavy loss to the State—a loss which, over the term of the loan . would run into millions of pounds, In view oftheHon. W. Downie Stewart’s exposure of the unsoundneSs (as well as the inadvisableness) of the scheme, Sir Joseph Ward ' has -had to confess that there would be a heavy loss, hut he says that it could be made up in connection with the sinking funds that would be provided for? The Minister is, however, right |When he points out that, if such a 'suggestion were to he seriously put forward, nothing else could he advanced that would have a more damning effect on the scheme in the

dfyes of Home investors. The path of cheap money most certainly does not lie in any :stuch direction, As regards- the £10,000,000 which would he used to build and extend railways, there would be a heavy loss also under that heading, for, last year, the railway earnings did not provide 4 per cent, on the. capital cost and only once in the past seven years has that rate been exceeded. What chance -would further railway works have, therefore, of paying at the rate of over 5 per cent. ? ft really should not bo overlooked, however, that a happy sidelight on Sir Joseph Ward’s dream is that if the present Government had not handled the. national finances ko successfully, lie would not, for a single moment, have paid it the compliment of suggesting that the Dominion’s credit stands so high on the London market that Home investors would welcome a chance to lend it £70,000,000 during the next eight or ten years, in addition to its further ordinary' substantial monetary needs during that period. The Dominion has, clearly, not, after all, “gone to the dogs,” even in the eyes of the United Party! „ .