THE PUBLIC INDEBTEDNESS.

Otago Daily Times, Issue 21266, 21 February 1931, Page 12

THE PUBLIC INDEBTEDNESS.

A good deal of concern was excited through the revelation in the public accounts for the September quarter that the Government had borrowed so heavily in the first half of the financial year as to increase the indebtedness of the State by over £9,000,000. It seemed difficult to realise that, without going openly on the loan market, and without affording any inkling to the taxpayers of the transactions in which it was engaged, the Government was able to raise so large a sum of money within so short a period. The explanation is, of course, that as long as the Government possesses borrowing authorities it is in a position to secure funds from State institutions that have moneys for investment as well as from loan companies and from individuals who purchase State securities “over the counter.” Since so much was borrowed in the first six months of the financial year, the public will naturally be curious and anxious to know whether an orgy of borrowing was continued in the December quarter, the accounts for which have now been issued. Unfortunately these accounts are less reassuring than might have been desired. True, borrowing has not gone on at the furious rate of the previous, six months, but the net effect of the transactions for the quarter was to add about a million sterling to the net indebtedness of the country. The borrowings during the nine months are shown in the following statement i Public Works (general pur- £ poses) account 5,759,310 States Advances Loans account 1,500,025 Railways Improvement Authorisation account .. .. 1,139,965 Electric Supply account .. 802,566 Rural Advances .. .. 681,486 Main Highways Construction account Education Loans account .. 485,000 Land for Settlements account 397,000 State Forests account ...... 285,000 Native Land Settlement account 117,000 Waihau and Ohinemuri Rivera Improvement account 5,000 Total £11,722,835 The redemptions during the period were: —• Public Debt Repayment ac- £ count 1,186,072 Electric Supply account • • 159,610 Loan Redemption account (balance of redemptions over borrowings) 144,926 Discharged Soldiers’ Settlement account 136,500 State Coal Mines Sinking Fund account 7,900 Total £1,635,008 During the past month loans matured to the amount of £1,104,885, for which the Government will have had to make provision, but during this month and next the loans that reach maturity are of small dimensions. In the next financial year, however, the Government will have to meet loans to the amount of £7,321,000. It is sufficiently obvious that, in present circumstances, it is necessary that recourse should be had, as sparingly as possible, to borrowing, and, since the rehabilitation of Hawke’s Bay can only be accomplished by raising money on loan, it follows that the Government should carefully schedule its most pressing requirements and defer, •as far as possible, any borrowings for objects that are not of an urgent character.