NATIONAL LOAN PLAN

Northern Advocate, 9 June 1933, Page 4

NATIONAL LOAN PLAN

“A GRANDIOSE SCHEME.” PRESS COMMENT. (Per Press Association.—Copyright.) CHRISTCHURCH, This Day. The “Christchurch Press,” in a lending article yesterday, deserbied the Cl 0,000,000 loan scheme for national . reconstruction as “muddled and fantastic.” The article proceeds: “It would be unwise not to recognise that the Auckland deputation has half understood an idea which is becoming increasingly popular throughout the world, and which has some truth in it. It is the idea that the deflationary profess which threatens all debtor coun>. tries with insolvency can only be ar- • rested by forcing money into circulation artificially through State expend!-■ ture on public works. Easy credit policies, as a means of stimulating investment and purchasing power, have failed. It is, not the cost of money which prevents reflation, but the lack of confidence.” The article concludes: “If the Auckland deputation had urged the Government to restore activities on useful public works projects abandoned since the depression, to finance them by an internal loan, and to,call- r for public tenders wherever possible, ~ it would have been urging a safe and . practical policy, but a grandiose . scheme for spending £10,000,000 of. loan money on anything and every-, thing has nothing to commend it, and will, if persisted with, do more to hinder than to encourage the development of a more liberal financial policy. ‘ ‘ The depresion lias at least taught the country the folly of reckless borrowing and inflated public works expenditure, and no scheme which ignores that lesson has a chance of adoption. Any increase in loan expenditure should be made slowly and cautiously, with adequate safeguards against extravagance. It should certainly be preceded by the establishment of a non-political board to control and plan all public works expenditure. Political control has been responsible for the worst excesses of the past, and once more loan money is made available there will be agitations in every electorate jfor a ‘fair share. J ”