BORROWING POLICY.

Manawatu Standard, Volume LVII, Issue 195, 19 July 1937, Page 7

BORROWING POLICY.

SIR JOHN SIMON’S DEFENCE

CREDIT NOT DAMAGED

(British Official Wireless.) RUGBY, July 17

The third reading of the Finance Bdl was passed in the House of Commons yesterday, and during the debate the Chancellor of the Exchequer (Sir John Simon) dealt with criticisms of the Government’s resort to borrowing to supplement the main contributions provided year by year by the taxpayers. He drew a distinction between the borrowing for immediate current needs that came to be criticised in 1931 and the present borrowing for a programme designed to give security for a generation to taxpayers, and which was accompanied by a large contribution from taxpayers. In 1931 there was no provision for repayment. The provision now being made included specific arrangement for the redemption of what is borrowed over 25 years, and the charge on the defence loan of an annuity. What was happening under the National Defence Loan was having no damaging effect on credit. On the contrary, there was a continuing increase "in employment, reduction in unemployment, and an increase in production. Referring to ' suggestions. that slumps always followed periods of prosperity, he said he could not accept such a Calvinistic view when, as at present, the expansion of trade was on healthy lines. He described as a fallacy the Opposition criticism that the present trade prosperity was of a temporary and artificial nature, due to a great extent to the expansion of armaments. Immense and sustained improvements in trade had taken place long before. He was not disputing that the additional expansion of armaments did not increase the volume of trade, but it was not the original or the main cause, of the present trade prosperity, and it did not follow that later they were going to fall back into the depths of a dcpiession.