ELECTION CAMPAIGN.

New Zealand Herald, Volume LXV, Issue 20081, 19 October 1928, Page 15

ELECTION CAMPAIGN.

SEVENTY MILLION LOAN. UNITED PARTY PROPOSAL. PRIME MINISTER'S ATTACK. "WE WOULD HAVE DISASTER." [pY TEL KG RAVH. —OWN COIUtESPONDEN T. ] DUNEDIN. Tluirsdny. "A policy of borrow, boom and burst, ■with posterity loft to clean up the scattered fragments," was tlio description applied by the Prime Minister, Mr ('ontes, this evening, to (he, main plank in tho platform of the United Party, as outlined by Sir .losepli Ward in his ji()eecli in Auckland. Mr. Coates saul it was difficult to Inv lievo any party with a pretence to political wisdom or a knowledge of th» requirements of New Zealand would suggest seriously that this country could stand up to tlio borrowing of in one year. It was more difficult to bolicvo that rucli a proposal could emanato from Sir Joseph Ward, who had hitherto lost no opportunity of criticising the* Government for borrowing money for ro productive public woiks. "If wo agreed to such a suggestion." said Mr. Coates, "wo would have disaster and a repetition of tlio effects of tho Julius Yogel policy, when New Zealand lost in a short time no fewer than 14,000 of its population by migration. Our credit would bo gone, and very soon wo •would be at the end of our tether. It jvould be boom and burst." Danger of Heavy Borrowing. Tlio Prime Minister said taking into jiccount tlio increasing production in all parts of the world, prominent economists and financiers had suggested the possibility of an easier range of prices. Heavy borrowing at a timo when prices wero high could lead only to disproportionate burdens on tlioso who had to find the interest when the values of produce fell. Moreover, no one could deny that it was unwise to go in for heavy .long-term borrowing when the interest rates wero at such a high level as they were nowThe London money market had always been ready to provide New Zealand witb tlio finance required for its developmental works, but it had said distinctly that it was averse to lending money for relending purposes. "I wonder how the financiers and investors there would view the proposal to borrow £60,000,000 for re.lcncling, and what would be the effect on our credit," said Mr. Coates. Inflation ol Land Values. Sir Joseph Ward's plan was to borrow at a rate equivalent to 5 per cent, and to releud that money through tlio Stattf Advances Oflico to settlers and workers at 4.75 per cent. The Prime Minister asked who was to pay the costs of floating the £60,000.000, the costs of administering the relending and repayment operations, and the extra quarter of 1 per cent tli.it would have to be made U| on tho interest. The provision of such a targe amount of money would be certain to rs-.'ilt in an inflation ol land values, and New Zealand had had too recent an e.\periencc of that to desire a repetition of it. Another disastrous result that would tollow the importation of such a large amount of money would he the effect on -he rate of exchange Mr. Coates said trio last difficult exchange problem after ihe war hi ought down the prices of all New Zealand produce, and it then cost in exchange alone one shilling and twopence a head to put New Zealand lamb on the English market. " Complete Change of Front." Speeches made by Sir Joseph Ward in Parliament wero referred to by Mr. Coates to show that Sir Joseph's latest remarks on the subject of borrowing represented a complete change of front in a year. Speaking on the imprest Supply Bill, in September, 1927, Sir Joseph War*' said: "Somebody has got to alter the system of finance in this country because we cannot possiblv afford to go on in the present profligate fashion importing money from abroad a* the rato of £18,000,000 in two years." The Prime Minister said Sic Joseph Ward had made no reference to the fact that in that year the Government had reduced its external borrowing by £4,000.000, in comparison with the previous year, and that, in any case, the whole of the money raised overseas had been allocated to reproductive- public works. " If Sir Joseph Ward calls our borrowing profligacy, what term is ho going to apply to his own suggestion to borrow £70,000,000 in one year?" asked Mr. Coates. "Hero is another of his speeches: ' I have never known in the history of this country the prodigality iri connection with borrowing in such a short space' of time, and if there is any honourable member can look with equanimity at what is going on in this country, then all I rati say is that he takes up an entirely different attitude from myself.' The Uncompleted Railways. " I'll leave, the leader of the £70,000,000 boorn-and-burst party to explain this extraordinary somersault in the arena of financial gymnastics,'" Mr. Coates added. Dealing with other aspects of Sir Joseph Ward's speech, the Prime Minister said i.t was not practicable to give effect to Sir Joseph's contrition that the m: completed railway lines roc!;' be finished 7ri three years. Apart from the financing of such rapid work, it would be impossible to go ahead so quickly with the available man-power in New Zealand. The Government had laid down a policy for the completion of the railways and other public works in their order of urgency, arid this poliev had received the endorsement of the people. tWIDER SCOPE SOL'(MIT. DR. TH ACKER'S INTENTIONS. [isv TEf.ECiItAPIt.—OWN' (OKI! ESt'ONDENT.] CIIMHTCHUitCM, Tluimcluy. Dr. H. T. J. Thaeker has refused an invitation to stand for Parliament this year His rejection of the offer is couched in the following terms:—'l find if is impossible for me to go into politics just at present. There is a wider scope open to assist mankind, and I am trying to find one to prevent disease and operation and to improvo health. My best thanks this time—perhaps later on." ENTHUSIASTIC MEETING. A meeting of friends and supporters was addressed by Mr. \V. T. F. Kclls Mason, official United Party candidate for Maunkau. at Greenwood's Corner last evening. There was,an attendance of about 60. and Ihe candidate was given a most attentive hearing, being enthusiastically applauded at the conclusion of his address. By resolution, the gathering formed itself into a committee, to further Mr. Kells Mason's | candidature. !