THE PUBLIC DEBT.

New Zealand Herald, Volume LXII, Issue 19143, 8 October 1925, Page 10

THE PUBLIC DEBT.

Some of the statements made by critics of the Government regarding the public debt have been so extravagantly inaccurate or so fallacious in their conclusions that a simple presentation of the salient facts is due to electors who may not have direct access to the information. Several candidates have made comparisons between the exports and the national debt at various periods, and because the latter is proportionately greater have found in the in crease ground for criticising the Government. But they have, entirely overlooked the fact that if the comparison has any value it must be confined to external debt. In 1914, five-sixths of the debt was held abroad; to- day, only slightly more than half is due to overseas bondholders. The increase in external debt in that period has been about £41,000,000, or less than half the 1914 amount, while exports have inoie than doubled: an the other hand, the internal debt has increased by £87,000,000, to more than fivefold the amount before the war. Even more reckless statements have been made regarding the increase in the debt. The actual facts are shown by the following comparison 1920. 1925. Increase c- £ £ Ordinary 97.258.659 119.930,859 22.678.20 ft War . . 80,089.025 70.6U1.722 *3.457.303 Soldier Settlement 9,345,000 9.819,836 464.886 Totals £201,170,755 £227,814,647 £26,643,892 'Decrease. During this period the accumulated sinking * funds increased by £6,205,275, leaving a net increase in the debt of £20,438,617, or an average of £4,087,723 a year. Before any comparison can be made with pre-war borrowing, allowance must be made for the general increase in costs; if the ratio is taken at only 50 per cent, additional, the annual increase is reduced to the equivalent of £2,725,000. Against the latter figure may be set the fact that during the five years from 1906 to 1911, the net indebtedness increased at the rate of £3,758,823 a year, or 40 per cent, faster than the expansion during the last five years. The significance of that comparison is emphasised by reference to the growth of the Dominion's population and wealth. From 1906 to 1911, the amount of the net indebtedness per head increased by £lO 4s Bd, equivalent to not less than 16 per cent. From 1920 to 1925, the relative charge has actually been reduced by £1 8s 4d per head. These facts are available to critics of the Government alongside the figures they select for the purpose of misrepresenting the character and the effect of its financial policy. They are alone sufficient to prove the recklessness of the charges of extravagant borrowing; moreover, loan money is now used more prudentlv and more economically than was the ease fifteen or twenty years ago, when roads and bridges votes were recognised and used as instruments of political patronaee, and protests against extravagant borrowing were not based merely imon the hmre increments to the debt but chief!v upon the wasteful expenditure of the money.