DOMINION FINANCES.

New Zealand Herald, Volume LI, Issue 15747, 23 October 1914, Page 7

DOMINION FINANCES.

LONDON ARRANGEMENTS. BANK OF ENGLAND LOAN, I VERY FAVOURABLE TERMS. [BY TELEGRAPH. —SPECIAL CORRESPONDENT.] Wellington, Thursday. An important statement in regard to the finances of the Dominion was made in the House this afternoon by the Minister for Finance (the Hon. James Allen). Mr. Allen, in the first place, referred to the operations of the State Advances Department. The maximum amount of advances to workers, which had stood at £350 since the outbreak of the war, had, ,he said, been raised to £400. He did not I know whether it would be possible later on to restore the limit to £450, at which it stood prior to the war, but a considerable amount had been paid out to workers, even under the £550 limit. The increase now made would, he hoped, do a great deal to provide work for unemployed carpenters.

In regard to loans to local authorities, Mr. Allen pointed out that provision had been made in the Public Works Estimates for various £ for £ grants. Unless the local bodies were enabled to raise the amount of their share of these items of expenditure, they would not be able to avail themselves of the grants. It had, therefore, been decided to make advances to local bodies up to £1000. This was not a large amount, but it would enable the locai bodies to avail themselves of nearly all the £ for £ grants or. the Estimates. It would probably be possible later on to increase the amount. Treasury Bills in London. Mr. Allen said that lie had been in communication with the High Commissioner in regard to the loan falling due in December, as well as the Dominion's current needs. He was advised that under present conditions it was not at all possible to raise either stock or debenture loans" in London. All that could be done was to arrange for immediate requirements through the issue of Treasury bills. He had already, before the war commenced, obtained power to issue Treasury bills in London, and by this means it would be possible to provide, not only for the loan falling due in December, but also for the requirements during the year. Sir Joseph Ward asked how much had been advanced to workers under the reduced limit. The £1000 limit for local bodies would be very valuable to some local bodies, but to others it would be of no use at all. Mr. Allei.: It is better than nothing. Sir Joseph Ward said that the carrying on of local public works was perhaps more important than that of the Public Works Department. He asked how much money had been advanced on Treasury bills in London, and what rate of interest was paid. Personally, he had never known any difficulty in raising money in London. • Mr. Nosworthy (Ashburton) : You have never had a time like this. Sir Joseph Ward said that bis experience was that there was no difficulty in obtaining money in London, so long as the borrower was prepared to pay for it. Mr. Allen: What rate would you go up to? Sir Joseph Ward: I should keep it as low as possible. If I were making a statement to the House about it I should say what I was paying. Last Month's Advances. Mr. Allen said that last month the amount paid over to borrowers from the Advances to Settlers branch was £108,960. From the Public Debt Sinking Fund branch there was paid over £6100, and under the Advances Office Sinking Fund Account there was paid over £21,230. The amount authorised for the month of September was £38,165. With regard to advances to workers, the amount paid over, with the restriction down to £350, was £30,135, and the amount authorised by the board was £14,740. Advances to local bodies had been temporarily stopped, but the amount paid over for the month to local bodies was £26.325 under the Advances to Local Authorities Account, under the Advances Office Sinking Fund Account £2475, and under the Public Debt Extinction Fund Account £2*Bo. The amount of loans authorised during the month was £4500. Advances by the Bank of England. In referring to the Treasury bills issued in London, Mr. Allen said that the Government had received from London £400,000, which was for the War Fund Account under the War Loan Bill. This money had not been secured from speculators. It had been advanced by the Bank of England at a rate of interest that he was not at liberty to disclose at the present moment. Mr. Myers (Auckland East) said "that in Australia it had been announced that the rate at which the Australian loan had been obtained was 5| per cent. Mr. Allen (laughing) : I am not going to say New Zealand is borrowing at 5£ per cent., because that is not the rate. We are not paying that price. I am not going to disclose the rate, because I am asked by the Imperial authorities to keep it secret, the reason being that the terms are exceptionally favourable. These advances, he continued, were on Treasury bills for six months, and would be met out of the loan which the Imperial Government was going to raise. The Imperial Government would raise enough to furnish to New Zealand sufficient money to return the advance made by the Bank of England. It was highly gratifying to him to be able to report to the House the very satisfactory arrangements that had been made. tie ventured to say .that no other Dominion had made more satisfactory arrangements.