TREASURY BILLS.

New Zealand Herald, Volume LIX, Issue 18087, 11 May 1922, Page 6

TREASURY BILLS.

A plain statement of the facts by the Prime Minister furnishes a crushing reply to the charge of dishonesty with which he was assailed by the Leader of the Opposition a few weeks ago. "When Mr. Wilford visited Auckland he attempted to create the impression that the Government would " fake " a surplus by borrowing money on Treasury Bills " without publicity," even the day before the year's accounts were closed, and would not explain the real position. Misrepresentation of this character did not improve Mr. Wilford's credit and it did not hurt Mr. Massoy's reputation, for while he may make mistakes he is incapable oi such trickery. He has declared the exact amount of the year's deficit and has given all the details of transactions in Treasury Bills. During the September quarter £20,000, and the December quarter £100,000, were raised by this means, of which only £20,000 was outstanding at December 31, and since the total issues for the year were £1,155,453, the Government had evidently to borrow some £1,035,000 in the last quarter, probably chiefly in January in anticipation of income tax receipts. Recourse to this method of finance will always be necessary whilo the weight of tax revenue remains in the closing weeks of the year, and on this occasion Mr. Massey was able to borrow on very favourable terms. The essential point of the matter, however, is that no Treasury Bills were outstanding at the end of the financial year, that

none has been issued since, and that the balance of £7,531,000 shown in the Consolidated Fund is not in any degree fictitious. Mr. Massey states the year's deficit at £339,831, but his account of the disposal of the accumulated surpluses shows that the charge against them was only £279,831. The, discrepancy is simply explained. The year's account benefited to the extent of £60,000 advanced to the Southland Electric Power Board in 1020-21 which was repaid, with subsequent advances, in the December quarter.