A SELF-RELIAM POLICY

Otago Daily Times, Issue 16666, 11 April 1916, Page 3

A SELF-RELIAM POLICY

NEW ZEALAND TO FIND ITS OWN WAR FUNDS. At yesterday's meeting of the executive of the Otago Patriotic and General Welfare Association Mr James Begg moved—"That, in view of the statements made by responsible Ministers of the Crown in England as to Uie urgent necessity lor economy in order that the whole resources of the country may be available for conducting the war, tlus association urges the Government to adopt a self-reliant policy, and to find within New Zealand tho money required for war expenses and so relievo the Imperial Government ol tho necessity of lending us the necessary funds." Mr M. Uoiien asked whether the question involved camo properly within the cognisance of the association. Ho thought it was a dangerous course to raise contentious matters at that table, and that, it would lead to unhappy results. The Miyor tMr J. J. Clark) said that, as far as ho could see, tho motion waa in order. The powers and scop© of the association were' very extended. Tho advisability of bringing political matters before the association was another thing altogether, but he did not think he could rule tho motion out. Personally, ho thought it was a mistake. Mr Begg said lie was sorry there were •objections to the motion, but he would move it. He would like first to say that this was not really a political question. As the Hon. Mr Allen had said at Milton, "Politics for the time being are dead." The Government had the whole-hearted support of this association, and would continue to have it throughout the war. But this did not debar them from offering advice. The association's function, in the widest sense, was to help to bring the war to a successful issue as soon as possible," and it should not hesitate to advise any course that it believed would tend to this end. Britain's financial burden was increasing, and was enormous. Taxation was being levied on a scale of which we had no conception in this favoured land. Economy was being urged by every statesman, and, as advice was not proving sufficient, legislation was being passed to compel the practice of it. New Zealand, by its present policy,' was adding to the burden. Mr M'Kenna, in his recent speech, expressed the thanks of the Imperial Government to the dominions for the public spirit' which made the demand for loans from Britain less than had been anticipated. Meantime, the value of our men was being discounted by our borrowing policy, as the same money used in Britain might produce a larger number of men. The method by which monoy should be raised, whether by loan or taxation, or both, need not be discussed. The principle of raising money locally was all he wished to urge. Even if New Zealand were to suffer acutely by raising money locally, it should still be done. If sacrifice was involved, we must make the sacrifice. But he did not believe that our financial would .be prejudiced. He was not a financial expert, but the ABOof finance seemed to indicate that money would find its own level, and they could not long enjoy cheap money here it it became dear elsewhere. The immediate effect upon Britain of lending us money was exactly the same as local extravagance. The effect for the time being of lending us five millions was precisely the same as if five millions were spent by Englishmen on useless luxuries. Mr M'Kenna indicated this when he said: "Relief would come to usin the future in regard to these loans, but we are responsible nowi" Unfortunately, New Zealand had not earned any share of this gratitude; but he hoped tha't in future we also would make smaller demands on Britain, and would share with the other dominions the gratitude of the Mother Country. , Roughly, one-half of the working male population of Britain was under arms, and;.'tte.j vast majority .of these were giving their services for about Is 2d per day. Compare that with the pay that our soldiers enjoyed. Yet, both taxation and contributions to loans were so widespread in Britain that it was literally true that we were borrowing from the men who Is 2d per day to pay our men four times as much. To him this seemed absolutely wrong. Though, 'it might be prudent finance if we looked ;pnly to New Zealand's advantage, it indicated neither a broad Imperial spirit nor true patriotism. The phrase, "the last man and the last shilling," had become historical.' If it had not .actually been used by our leaders, it expressed • what we all felt must be given if necessary. Hβ submitted that the best policy would be to spend them simultaneously. ti .Were i.we going to send the last man before we spent the ing ? The money would be of little"; use when the men were exhausted and had to bear the whole dead-weight. No doubt, in the future, more or less remote, both interest and principal would be paid; but, meanwhile, we had to deal with the present. If the war became a war of financial endurance, the future might be too late. Everything seemed to point to our duty to bo self-reliant. Our patriotism,-our debt of gratitude to the Mother Country, our own self-respect, and even our sell-interest,' required that we should relieve Britain of the burden we were at present imposing' upon her. , Mr J. A. Johnstone seconded the motion, and eaid there was no country under the British flag that had benefited as New Zealand had as the result of this European conflict. lie. effects were not apparent here at all, if we (accepted tho loss of the lives 31 some of our noblest sons, which we deeply deplored; but wiien we considered wiry ii> was our bravest gave up their lives, we must all be prouder of tnem than if they were in our midst to-day. We had prospered more than any other of the eister lands in the Empire, and notwithstanding that, he would remind the meeting, and our National Government : too, that, from a financial point of view, there was no part of the Empire that had done less. Ho did think,notwithstanding what a ' Minister of the Crown had said to the contrary, that tve, as an important section of the British Empire, should be ashamed that we were not bearing our share of the war expenditure. This Minister had not only justified the action of the, Government 1 in not raising a local loan for war expenditure, but was reported to have'said that if such a ■oan was decided upon he would bo no j.irty to paying a higher rate of interest for it than 4| per cent. Our National Government had no fight to expect our moneyed institutions and private individuals to lend it money at a less rate than the Imperial .Government was paying—namely, & per cent. During tho past financial year, in addition. 0 the regular loans for war purposes, the liome Government had issued something ike £400,000,000 of short-dated Treasury jills at that rate, although quite recently :he rate of interest had been altered and low stood at 4i per oent. for three months, Hj per cent, for six months months, md 5 per cent, for 12 months. Hβ did not aiow what rate of interest our Government >vas paying for the recent loans it had ar•anged with the Imperial Government, but f his memory was not at fault the late Colonial Treasurer stated that he had fixed ip some loans just after the war broke out )n 'most advantageous terms, and although ie did not say what the exact rate was, :he impression left on his (the speaker's) nind was that it was something considertbly less than 5 per cent. If such -was tho •ase, it was a positive disgrace to us as British subjects that we should liave ac■opted from our Imperial Mother money it a loss rate than it was costing her. We nd not under existing conditions any justiioation whatever for expecting to borrow noney in the dominion at less than 5 per ent., for, comparatively speaking, there vore very few individually rich people in Cew Zealand , , whereas banks, insurance comiinies, trustee companies, and other finani.il institutions were all managed by men fho wore merely the trustees for other leople's, funds, and for that reason they mist consider the rate of interest that they ibtained for such funds. We know as a iv'Hct of fact that the banks and other intitutions trading in the dominion had lready invested considerable sums ip these imperial Treasury bills, and in British war oj.ns. ,and it was'to their, credit .that they iad done so. It was equally certain that E our rulers had done their duty and de-, ided to issue a New Zealand! 5 per cent, aan locally for war purposes it would havo icon very largely supported, not only as an n vestment, but also from patriotic motives. Such action on tho part of our ' Govern!v. Nt would havo been much appreciated iy the people of tho Motherland, as was vldonccd by the. remarks of the Chancellor f the Exchequer in London last week, when [.' eulogised the public spirit of the overras Governments for having to a certain xtent at all been financing themr>l vce. He roferred ', of course, to Australia, ■here tho Government asked for £15,000,000 nd had obtained £35,000,000. and also to Canada, whore the appeal was, in tho first jan for war expenditure. £10,000,000, and wording to memory £20,000,000 was tenorcd and accepted. What those countries ad done, we should and could do, for ppr end of our population wx> wero better able 1 rlo it thsn oiflicr of them. In h-s jutlpti"nt, to attempt to raise a local loan at 4i t cent, would be at least a partial fr.iluro, iv tho lnrgcr lenders would continue to lvret in the Imperial Treasury, bills and ■>ans. whcrMS only those in tho dominion 'ho were not so oircurnstanced would be a

available as invest ore in such a loan at thu lower rate. Ho was of the opinion that i't was tli3 duty of our Government to raise a local loan at 5 per cent, to covor our war expenditure, if not to tho full extent, a.t least to a very considerable- extent, and he was confident that the effort made would be, largely supported by the financial institutions and pfioplo of this country. Ho knew that any amount wo might raise- in tho dominion would appear infinitesimal in comparison with the colossal sums thnt, had been raieed in the Motherland, but every extra million that wo could raise was helping tho Empire, not only to the extent of the amount raised, but booauso the result would place upon our loyalty to. tho Empire a value that could not bo expressed in more words. He regarded it as a sordid view, unworthy of a peoplo that claimed to havo a destiny and a mission in tho world, to 6ay that we must make all the profits wo could out of the war, and hang on to every penny we could make, so thai wo might bo in a position to take tho fullest advantage of all tho opportunities that we expected to como to ue alter tho war, and also to obtain higher rates of interest if wo had money to lend, and of making greater profits if we had tho capital to put out. This was not the way to victory, and if such a spirit animated the rest of tho Empire we could safely say that we would be certain to fail in winning tho war, in which wo and our allies were in death grips with our infamous foes. Fortunately, that was not the spirit of Britain and'most of her daughter States overseas, and so it behoved us to attempt to remove tho stigma that was in danger of resting upon us. We must win this conflict, and we could only do so by giving our lives and our means freely; and with a complete absence of the bargaining and huckstering spirit. The Hon. J. T. Paul said he regretted very much that Mr Johnstone had not followed Mr Beggr's line of argument. He thought Mr Begg took up the right attitude when he said it was not tho business of tho association to say how assistance should be given to the Mother Country; whether by loan or taxation.. Mr Johnstone took up a strong position in favour of a 5 per cent. louji. liis belief was that if we floated a loan the interest should be b per cent. He (Mr Paul) wanted to contrast that witli the eaenlices the men going the front •were making.—Everyone ol thorn was uuiking a saculice running into several shillings a day. We coiitomplated forcing- compulsion upon a certain number of our citizens, saying to them, - '¥ou must make sacrifices independent of your parting with your weekly earnings." iudiviuually and collectively we had to make sacrifices, but it tho war was going to lost much longer the personal sacrifice butween men having money and institutions having money, and the men who were lighting our battles must be made much more tquai in the future than it had been in the past. Mr Johnstone said he was not advocating a high rate of interest at all. The market value of money was a thing he had no control over. Mr G. i'enwick said he was in entire agreement with Mr Begg and Mr Johnstone, who had put the position in a clear and forcible manner. He did not think it -was intended that the Government was to be asked to force people to take up the loan. It was an appeal to come to 'the relief of the Mother Country, and bear a burden which New Zealand should bear. He hoped the executive would agree that it waa desirable to have this loan placed upon the market, and that if it was to be successful the market rate of interest should be given. He thought Mr Paul was wrong in the view he took. Mr Paul said that the point he wanted to make was that if euch a strong case was to be made out for the market rate of interest, then there should be the same case made out for the ruling rate of wages. Mr Bcgg said he deprecated it going forth that anyono was- doing a patriotic) action by lending the Government money at 5 per cent. The sacrifice in money must come in i the forni of taxation—drastic taxation, if necessary. The motion was then pmt and carried without dissent. ■