DEBT OBLIGATIONS

Otago Daily Times, Issue 23885, 12 August 1939, Page 11

DEBT OBLIGATIONS

NO THOUGHT OF REPUDIATION AN EMPHATIC AFFIRMATION OPPOSITION TACTICS DEPLORED (From Our Parliamentary Reporter) WELLINGTON. Aug. 11. An emphatic declaration that the Dominion would honour its debt obligations in their entirety, both now and in the future, was given by the Acting-Prime Minister (Mr P. Fraser) when speaking in the House of Representatives to-day to the amendment to the Financial debate moved last night by the former Prime Minister, Mr G. W. Forbes (Opposition, Hunanui) Mr Fraser declined to allow the actual terms of the amendment to be submitted to a vote, as he contended that it was entirely unwarranted, but he made a clear statement which was commended by the Opposition that repudiation of the country’s responsibilities had never been contemplated by the Government or by the Government Party. Although urgency had been taken this morning for the completion of the debate and a long sitting appeared possible, the House adjourned just before 5 o’clock when the discussion on the amendment came to a close following a division. By 39 votes to tl the formal motion “ that Mr Speake* do leave the chair ” was sustained and the alteration proposed by the amendment was rejected.

The terms of the amendment moved last night by Mr Forbes were as follows;-

“ That this House urges the Government to consider whether the time has arrived for it to state that this House has no sympathy with any suggestion of repudiation of our debts either overseas or In New Zealand, and affirms that the Dominion is determined to fulfil its obligations both now and in the future; ‘hat the Government gives an emphatic contradiction to any suggestions made in thtf House, implied or otherwise, to the contrary, and that this House expresses appreciation to the United Kingdom Government of the generous treatment accorded to New Zealand in the recent financial negotiations ir. London."

Appreciation of Mr Fraser’s assurance that New Zealand would honour its obligations was expressed by the Leader of the Opposition (Mr A. Hamilton), who said that in view of the loose talk regarding the possibility of repudiation which had been heard both inside and outside the House some statement of the kind was urgently required.

Among the speakers in the debate on the amendment was Mr J. A. Lee (Govt., Grey Lynn), whose speech on Wednesday night precipitated the Opposition amendment. He repeated his assertion that the terms imposed on New Zealand for the repayment of the £17,000,000 loan were unduly harsh and declared that he was pleased to stand for New Zealand while the Opposition stood for the foreign bondholder.

A PARTY TRICK ATTEMPT TO, EMBARRASS GOVERNMENT CLEAR-CUT DECLARATION ALL DEBTS TO BE HONOURED ; (From Our Parliamentary Reporter* WELLINGTON, Aug. 11. “This amendment is entirely unnecessary,” said Mr Fraser after informing the Speaker that he did not propose to treat it as one’of no-confi-dence. ** There is no foundation, in fact,’" he said, ‘‘for the suggestion that repudiation of the country’s responsibilities has ever been contemplated by the Goyermenl or by the Government party.” “Such a suggestion,” the Minister said, “ can only be construed as a mere party stunt, with perhaps the ulterior 1 motive; of embarrassing the Government financially by raising groundless alarm to regard to the safety of money advanced on loan to this and to previous Governments. At the best, the amendment is a work of supererogation. Assurance Unnecessary "There has never been, and never will bet, any need to ask this Government for an assurance on the points raised In the amendment,” Mr Fraser said. ‘‘The only occasion when there has been anything like repudiation in this country was when the previous Government forcibly reduced the rate? of interest.” Mr W. J. Poison (Opposition Stratford): You voted for it. The Government had never left the country in the least doubt as to its attitude on the important matter of the country’s financial obligations and responsibilities, Mr Fraser said Every member of the Government had made statements definitely end expressly, repudiating any suggestion that in any circumstances the Government could possibly contemplate for a sing’e moment such a wholly reprehensible and dishonest course of action. Every Labour candidate at the general election had made similar statements “ It 11s a fact that the loans, the repayments of which fall clue during the next few years, were incurred by previous Governments over a long period of years and have been used in the development of the country." : Mr Fraser said. “ but it is immaterial from the point of view of governmental and national responsibility what Government contracted the debt. The Governments that did so were the elected representatives of the people and raised loans In the name and on behalf of the people of the Dominion and were duly authorised and empowered to do so under our democratic institution Those debts are the country’s debts, acknowledged by all. and must be met and discharged in due course in the accepted way." Opposition members: Hear, hear! Bound to Keep Faith "This Government has raised loans here and in Great Britain in the name of the people of the Dominion." Mr Fraser continued. “People who had money to Invest, some of them who had only saved small amounts, accepted the pledged and authoritative word of this Government as was done previously in the case of other Governments.

“Even mention of the need for an assurance on the points specified in the amendment is calculated to do harm to the country’s credit by arousing suspicions which have no foundation in fact,” Mr Fraser said. "Apart from the dishonour of such a course, a moment’s reflection will show any clear-thinking person that even the conception and mention of the idea of repudiation, far less its serious contemplation, would not only be inimical to the interests of our country but would be disastrous and ruinous. Members of the Government realise, as sensible persons must realise, that the trade, commerce and industry of this country can only be conducted satisfactorily and successfully on a sure foundation of trust and confidence. If that trust and confidence ' were destroyed or weakened by projects involving deliberate dishonesty on the part of those wielding Government power, the whole economic structure would collapse, involving everybody in ruin. This Is even more immediately true of our overseas trade.”

A Baseless Suggestion

Mr Fraser said that the attempt by Mr Forbes to suggest that the member for Grey Lynn had advocated repudiation was baseless.

; Opposition members: Oh! Mr Lee had analysed the burden on this country because of the recent loan arrangements in London, Mr Fraser added, The Government accepted full responsibility for those conditions. They were not the sort of conditions the Government liked or thought it had the right to expect, but taking into account the financial position in Great Britain and the sterling funds position of New Zealand he considerd that the terms obtained were the best possible at the moment. Further, there would be no attempt on the part of the Government to run away from them or to place the responsibility on the Minister of Finance. Every member ofthe Cabinet was consulted as the negotiations proceeded and every Minister had an equal responsibility with the Minister of Finance.

“The member for Grey Lynn looked at the conditions as members of the Opposition have done,” said Mr Fraser. “He said that if the same conditions were imposed by any consensus cf circumstances when a great amount of loan money fell due in a few years’ time he doubted if the Government’s resources would be sufficient to face up to the position.” Government members: That is what he said.

Mr Fraser said that if any member should suggest that the Government should contemplate repudiation, then he would immediately ask permission as trustee for the Prime Minister to repudiate that member so far as any such suggestion was concerned. He could not find any trace in Mr Lee’s speech of a suggestion that the Government favoured repudiation.

Mr W, A. Bodkin (Opposition. Central Otago): A lot of people outside have.

Opposition Rebuked

Mr Fraser: If members of the Opposition imagine they can read a meaning into words that aie not used, then I can only marvel at the complexity and ingenuity of their thinking urnc,ass Mr Bodkin: The amendment has forced the Government to make a satisfactory statement. Mr Fraser said the Government did not require any forcing. Every member of the House knew there would be no vote on the terms of the amendment. A decision would be made on toe words in the motion that the Speaker leave the chair to enable his Majesty to get supply. “Who brought the word repudiation on to the floor of the House?" Mr Fraser asked. ‘‘lf members of the Opposition were sincere and thought there was any doubt, all they had to do was to use the forms of the House in the ordinary way and ask permission to raise an urgent question, which would have been answered immediately.” Mr Kyle: Ever heard of the Lee letter? Mr Fraser: This question is too serious for stupid remarks.

"This Government,” Mr Fraser said, “every individual member of It. indeed every member of this House, is in duty and in honour bound to keep faith with those who trustingly accepted that pledge. Any other attitude would be a base betrayal of those citizens concerned and of the country as a wholle.

“ If the Government were asked, its answer to the first part of the amendment would be that it has no sympathy with any suggestion of repudiation of our debts either overseas or in New Zealand,” Mr Fraser said. “ Further, the Government would affirm that the Dominion is determined to fulfil its

obligations both now and in the future, and would give an emphatic contradiction to any suggestions, implied or otherwise, to the contrary. The answer to all the questions asked in the amendment is in the affirmative ” A Questionable Method

If the Opposition had been moved ourely by a desire to place the country’s credit in an unassailable position. Mr Fraser added, it could have adopted the time-honoured method of consultation with the Government, and the Prime Minister, if he had been well, or he. as deputy, would have been pleased to move a resolution embodying the necessary affirmations, and the Leadei of the Opposition could have seconded it. Instead of that, the fair name and hoppur of the country had been dragged by the Opposition into a pettv partv struggle. Mr W. A. Bodkin (Opposition. Central Otago): By the member for Grev Lynn

“If the Opposition had been concerned about the credit or stability or the future of the Dominion it would have taken the course I have suggested,” Mr Fraser added, “In this democratic country a debt contracted hy any Government is the people’s debt, and no Government can gel awav from it.

“ I have never heard any accredited representative of Labour, in party caucus or party conference. make anv mention of repudiation," the Minister said, “ The attitude of the Government is perfcctly clear.

“Nothing is more delicate than the 'credit of a country,” lie continued, "and when the Opposition made New Zealand's credit a matter of party controversy I am sure it did not appreciate what a bad influence it could have Refusal to Put Amendment “ I hesitate to suggest that the Opposition would deliberately sacrifice the country’s interests." Mr Fraser said “ but the amendment makes it look very much like that I hope common sense will prevail and that the Opposition wili withdraw the amendment which would br a decent thing. In any case the House will not vote on the terms of the resolution but on the question of granting his Majesty’s representatives the right of supply, and this thing will go into the dustbin of foolish resolutions sprung in a foolish and dangerous way.”