The Otago Witness WITH WHICH IS INCORPORATED THE SOUTHERN MERCURY (TUESDAY, MAY 8, 1928.) THE WEEK.

Otago Witness, Issue 3869, 8 May 1928, Page 47

The Otago Witness WITH WHICH IS INCORPORATED THE SOUTHERN MERCURY (TUESDAY, MAY 8, 1928.) THE WEEK.

••Nunquim allud natura, allud zapientla dixit.** -JuvasaL. "(Sood nature and good aenae inuat ever loin.*** F&s-b.

Dominion Finance.

The Minister of Finance evidently be-

lieves in taking the public into his confidence, and in a speech in Cambridge a week

since he disclosed the condition of Dominion finance, especially in regard to the fiscal operations upon the Consolidated Fund. Mr Downie Stewart, while his anticipations as to the year’s finance were shown to have been well within the mark, was bound to confess that the satisfactory result had been contributed to by unexpected influences and tui foreseen factors. Despite the wonderful improvement in the volume and value of the Dominion’s exports, the full strength of which, however, will not be felt until the current financial year, the revenue for the past year is less than the preceding annual period by some £190,000, and even then it was above the Budget estimate. Happily for the Treasurer the expenditure was below the estimate, and also below the actual expenditure, this enabling the Minister to show a surplus of £lBO,OOO, a situation which Mr Downie Stewart deems satisfactory when all the circumstances are taken into account. The Minister is entitled to credit for estimating so nearly the total revenue and the total expenditure, but if examined in detail this foresight does not show to such advantage. In particular the Minister’s anticipation in regard to the income tax revisions have scarcely been borne out. Mr Downie Stewart anticipated that the income tax would yield a total equal to the previous period, when the total was £3,422,216; as a matter of fact the revised schedule brought in a lower amount by £150,000 than was anticipated. Only one deduction can be made from this surprising circumstance, viz., that the wealth to be taxed has diminished considerably. As an offset to this significant fact the Minister was comforted by a substantial return from the Customs. From this source the Minister had budgetted for £500,000 less than the preceding period, whereas the estimate was exceeded by £170,000. Perhaps the most stimulating statement in the speech was that by the exercise of a wise and rigid economy the departmental expenditure has been reduced to about £250.000 below the estimate, and below the expenditure of last year. The speech throughout conveyed the impression that the Dominion as a whole is slowly but surely emerging from the financial distress and depression which has weighed so heavily upon the business world.

The Management of the Railways.

After a six years’trial the Board of Con

trol entrusted with the management of the railways of the Dominion is to he superseded by

the appointment of a General Manager. The Prime Minister, when he made the announcement, was content with the remark that a combination of circumstances had made the change possible and convenient. He did not explain or enlarge upon all the reasons which had induced the decision. The probable truth is that the railways of the Dominion have reached a " position when, owing to the keen competition of motor transport, nothing short of energetic and progressive individual administration will suit the situation. Generally speaking, experience teaches that from its very composition a Board is not able to act with the same amount of promptitude as is an individual, and providing that the man can be found with the ability to assume sole responsibility the result is seen in increased efficiency. The future of the railways of the Dominion is of such importance that every expedient should be tried in the endeavour to extricate them from the slough of despond into which they have inevitably been driven by the competing motor traffic. The irony of the situation is seen in the fact that the Government, which owns and runs the railways, is also committed to pay the expense of keeping up the almost parallel road used by the motors. The newly-appointed General Manager has his work cut out in finding a solution of the problem, and if he succeeds he will earn the thanks of the entire community.

The Debt and the Loan.

The statement that the public debt of

the Dominion at the end of last March totalled over £250,000,000, and that, dnrino- tl>n Inel

tnat during the last financial year the total had been increased by over £,5,500,000 should give the thoughtful man reason to pause and think. Against that statement, however, is the encouraging fact that the dead weight of the war debt is showing a gradual reduction, and the amount has, within the last six years, come down a matter of £10,000,000. There is the additional fact to be remembered that, apart from

war debt, something like 70 per cent, of the public debt of the Dominion is directly reproductive, and represents no extra burden upon the shoulders of the taxpayer. .That the Dominion, despite its heavy indebtedness, stands in high favour amongst the fin;. .ciers of the Homeland is evident in the remarkable success of the flotation of a £5,000,000 loan upon the London market for purposes of public works. That loan was subscribed seven times over, so that the investors will only receive 14 per cent, of their applications—a most noteworthy circumstance, and. which attests to the inherent soundness of the Dominion’s financial position. At the same time there is a distinct temptation and even danger in thfi comparative ease with which money can be obtained upon the best of terms from the British investor. The Government s financial advisers have been exceedingly astute in placing the New Zealand loan upon the market at the psychological moment, since financial markets arc exceedingly sensitive and respond to world influences. It is of the utmost importance that New Zealand shall continue to retain the confidence of the British investor, especially in view of the heavy obligations to which she stands committed in the near futme in respect of the maturing of a number of loans amounting in the aggiegation to an exceedingly large amount. It is esesntial that, these renewals be made upon the very best terms procurable, wherefore the success of the £5,000,000 loan just floated may be taken as a happy augury cf the Dominion’s financial future.

Japan and China.

The civilised world to-day is so highly

organised and consequently sensitive to events in every part of

the globe that the threat of a war in the East is sufficient to create alarm in all the capitals of the West. Hie exact origin of the trouble which has arisen in the Shantung province of China between Japanese and Chinese troops is shrouded in contradiction, and there is an absence of corroborative evidence of either story. The fact remains, however, that a body of Japanese troops are surrounded by a Chinese army, and that incipient hostilities have already taken place. The tremendous possibilities of such a situation are sufficiently obvious. The reason given for the dispatch of Japanese troops into Shantung was that the lives of Japanese residents in that region were in danger. It may be hoped that the negotiations entered into between the Japanese and the Chinese Nationalists will have a satisfactory outcome, and thus the ever-present dread of hostilities on a large scale between these two great Eastern nations be promptly averted.

Britain in Egypt.

The firm attitude taken up by the

' . . 1 ’V British Government in -EffJ’pt has not been without effect, and if i. IO rvA zvi-i i>% A

tl! e oflending Assemblies Bill has not been withdrawn by the Egyptian Government it has at least been postponed for consideration sine die. The idea of postponement in the place of immediate withdrawal represents an attempt to save the Egyptian face, for to all intents aud purposes it means the same thing. Britain’s action was an international one, since she stands for the safety of all foreigners resident in Egypt, The Egyptian Government, led by Nahas Pasha, may promote legislation in the interest of Egyptian independence, but the moment such legislation threatens danger to foreign interests Britain will at once step in with her veto. This is the plain meaning of the incident just closed, and it defines the situation exactly. And there it will remain as an object leson for future action and. conversations.