THE FIVE MILLION LOAN.

New Zealand Herald, Volume XLVIII, Issue 14581, 18 January 1911, Page 8

THE FIVE MILLION LOAN.

PRIME MINISTER'S DEFENCE.

A REPLY TO CRITICISMS.

[" IST TELEGRAPH.—PRESS ASSOCIATION'.]

CniusTcnrncrt, Tuesday. Speaking at St. Kilda last night the Prime Minister (Sir Joseph Ward) said the depression of two years ago had happily been followed by a revival of trade and by a general prosperity that had permeated the country from end to end. An increase of £703,000 in the ordinary revenue in nine mouths was something they bad a right to be proud of. An increase of £810,000 in the revenue ; for tho 12 months, as compared with the. preceding 12 months, was a wonderful evidence of the revival of trade. Yet there wore some people who said tho accumulations of money in the country were indicative of stagnation, and of a want of confidence in the Dominion. Of course, the country could not go on year after year adding to its industries by leaps and bounds as it had been doing for the last 15 years. If New Zealand were to double its factories to-morrow, what would they find? Tho proprietors would bo the first to declaim against overproduction. It would be impossible to sell the goods, and consequently they would not bo able to pay the recognised scale .of wages to their employees. Becauso there was an increase in tho accumulation of money •in the country, some people held it was a sign of weakness.

Referring "to the £5,000,000 loan, the Prime Minister said it was being condemned in certain places. What were the facts ' early every financial journal of consequence in England had referred to it as a satisfactory transaction. The loan had been floated at 3£ per cent., at £98 10s, when the bank rate ruling in ; England was 5 per cent. In eight, months the State-guaranteed Advances branch had lent out to workers, to settlers, and to local bodies £1,500,000. The local bodies paid 5% per cent, for the money. Was there any person. or firm in the country who would give them money at that rate? It was the local bodies, the settlers, and the workers who got the benefit of the money. Only a few days ago lie was speaking to a man who was at one time paying 16>> per cent. He had since borrowed from the Government at 4 per cent., and to-day ho was a prosperous man. It was those who years ago did not want cheap money to be obtained for the people who wero now criticising the five million' loan. Until this country had finished its railways, until it had made some provision for the acquirement of tho lands necessary for the people, and until it had reached a point when one could say the Public Works policy was about completed, it would bo necessary to obtain the requisite moneys to carry on public works. It had to bo remembered that much of the money borrowed was being expended on reproductive works, such as roads, railways, and tho acquirement of Land for settlement. Therefore when they' saw it stated that the Government was pursuing a wild course and did not recognise what tho people could stand in tho way of financial obligations, he hoped they would remember his reply that the Government knew tho position, that- it recognised its responsibilities, and that it was more anxious than many of its critics to curtail the total amount required for public expenditure, but at tho same time it recognised to tho fullest extent that without borrowing money it could not carry on a vigorous settlement of the people on the land or give to those who went into the interior tho necessary public works already possessed by many of those who lived in settled parts. The Government would commit an act of retrogression if it did not recognise that every . pound of money borrowed had a magnificent asset behind 'it, ; and that being so it was bound to show courage and unflinching determination to borrow what was within reason required in the general interests of the community. (Applause.) The taxpayers were not paying for the money borrowed by tho local bodies, by the settlers, and by the workers. The people who borrowed it paid tho interest, and when tne people desired the Government to pursue that excellent lino of policy what was tho use of members of Parliament who voted for the , loans speaking against tho policy? What was the use of a sectibn of the press opposing what the Government was doing and then finding fault with everybody but their friends? (Applause.)