BANKS AND BORROWING.

Oamaru Mail, Volume XXXVIII, Issue 10518, 28 July 1910, Page 1

BANKS AND BORROWING.

/ THE PRIME MINISTER ON STATE BANKING. s .. By Telegraph. - . (From Our Own Correspondent.) Wellington, July 27. The most interesting; phase or the Prime Minister's reply to the' Labor deputation that waited on him to-day from the Trades . Councils Conference was that in which he dealt with State banking, the nationalisation of monopolies, and the cessation of borrowing, all of which were urged by the deputation. "It is beyond a!) question, said the Prime Minister in the course of hi:-, reply, that we- eanr.ct nationalise all the 1 coal mines; for instance—and you your?f selves are against it by resolution —this would moan borrowing a very largo cum. Wo cannot nationalise even by a clow process the means of production; j that meal'..-, borrowing an enormous sum. I Vv'o must be practical, and wo realise that you want to bo. Wc cannot nationalise all the means of distribution without creating some powerful organisation for which we would require to [ borrow t!ic money. Tliat is an impossibility. You wbli to do what is right j in the interests of 'lie workers and we wish to do the name, but I no not want : t.; tell you that the Government can j lay down -a policy that might mean a j very r-.criouf; position m ibis country, al- | the ugh 1 think we wdl succeed on some j of ihe main tilings wc are anxious to j grapple with." —State Banking.— I Me recognised, Sir Joseph Ward conj finned, that there was a very sincere I desire to have a legislative enactment i i.-rovldcd to meet the request for a State i First of all he would like to say j th;:i the .State had a million and a-hali" ; of direct interest in the Bank of .Now j •'aaiaiui at present. j Mr K. ■'). Carev: It should have been i made a State bank. . The prime Minister: I am saying , | what idle position is now. At that . litiii- it would have involved a great ■ many millions, and of course there is j a luie at whieii we have to stop borrowi In-, whether we like it or not. | i The Prime ?»lii:istrr went on to point ' } out that tiie (State had a majority on ( ! tin- directorate, and it had control of ' the Bank as far as audit was concerned, . and his judgment was that so long as .' the country was associated with * the . ilank of Now Zealand as a shareholder : .receiving dividends it would be imposj rible tO | give effect to what was being ' urged by the depin.-atiou unless they wanted two State banks l-in.rng at !.•::.• time. It was iris clear doc" u> point <; out that excelling one or two Continental banks, he did not i;:i :>v, of anv C other count:-. 1 that laid so close an asso- i elation with a State bank.. In the ab-| ;; s.-ac-t, the deputation's proposal v. itnji; that via.ic should be an independent | f Stats bank. Vfe cannot do it," declared | ( Sir Joseph, "becauve while the State Las I S di-.guise the fact that we 311 n.it create j directly a very considerable iinanciai j c not paper mora;-., before we could em- :• bark on a 'proposition 01 the kind." he had prepared a Pull for the issue of v Treasury nates and the abolition of <t what are called bank mites. This was f rot put into operation because at the - ( time* liis colleagues did not see eve to -j y eye with him on Vhe matter. lie re- bi garde.! the Issue of State notes in some *- c conuti ies he would not name as only J : Mr J. A. Kanan : Not the Canadian K a.vsteni-' ' Sir Joseph: That's another one. I c:

' am fi-iiiiff into the whole question of : j with very great earo ami judgment. I State notes frn;n the paint of view of ! utilising a h.<-£0 number of them in the interests of'tlio people is a fallacy and it delusion. They do not improve the financial position of a .eoimtry, hut the issue of Treasury notes 0:1 proper lines with ::n adjustment of the hanking system is another matter, and I have been go in;; into it. .. The Prime elhibta:' lepeated that in sn important e. matter it ivas necessniy not to act rashly licean.se a Government had to consider the general interests of the people, otherwise with the best intentions in the world a rrvolittion in the financial world would he brought ahout and the worker:-.' Though the Government might he criticised for actiujr slowly it was its boiinilfii duty to approach the matter slowly in view of its enormous responsibilities to every class, jnakinj; perfectly sure that whatever vers clone was scAind raid would net. dislocate the commerce of the country. —Cessation of i'orrowin<>;. — The deputation's proposal that further borrowing should cease excei:>t for the redemption of loans and the coinFarliatnent could not be enacted; and the Government was not fining to try, because in effect if. weuid throw thousands and thousands of meji out of employment. Xo country in the world in its developmental .stage had ever been able to get on without borrowing. ilr Carey: The Commonwealth has never borrowed. Sir Joseph Ward : Because the Commonwealth has not bad to do the work, the States have had to borrow. He added that if a Labor Government came into office to carry out such a policy it would wreck itself and the country .before it knew where it .stood, arc! would throw thensauds people ant of employment. The Dominion had borrowed for advances to settlers and workers, the purchase of land, and the completion of railways, for all of which expenditure there whs an asset. There wot:id be victhiug more disastrous titan to stnr> borrowing. A Voice: It would increase taxation. Sir Joseph: Yes, enormously. Later on in the session the Prime iiie.istcr added, lie iatended to have comothirit; t-> sav on the emotion when rb ; -!i;;p v.itb the Public Debt Extinction ]J;11.