The Pahiatua Herald. with which is incorporated THE PAHIATUA STAR. Published Mondays, Wednesdays, and Fridays. WEDNESDAY, AUGUST 8, 1894. THE CHEAP MONEY SCHEME.

Pahiatua Herald, Volume II, Issue 806, 8 August 1894, Page 2

The Pahiatua Herald. with which is incorporated THE PAHIATUA STAR. Published Mondays, Wednesdays, and Fridays. WEDNESDAY, AUGUST 8, 1894. THE CHEAP MONEY SCHEME.

Tint tramp card of the financial proposals of the Government is without doubt that embodied in the term “ financial aid to settlers,” and t>he main features of the debate on the Financial statement centre on this . he principle, but we are opposed to the meihoda proposed by lie Government to inaugural sohe e. . 1 make the transaction a thorough I lender a State guarantee as to the safety of principal and in: but this guaranty- should as far as possible take the form of a contingent one as it would be under the proposals submitted by the Colonial surer. i j credit is no ii« w thing in this colony. The Public Trust Office end thi? Government Life ln.suranco Department are belli guaranteed by th State, and the suet*- ss of these institutions are largely to ho attribu .d to that fact. Within Hi* •; w w k . ■ Colony has guaranteed the Bank of Mew step to take 1 th<‘envoi i. , n ; in tilled 1 !) be anything wrong in do ;v, v i:jcanteeing tne ppro\ s m r a > | fers a substantial benefit' on the community. The principle has already been confirmed in tin cases cited above and is therefore deprived of all novelty. It is but an extension of a principle, another step forward on the same road The scheme propounded by the Government is an advance step but the road diverges to the left, and thereby the feeling of safety is lost. In the one case B in New Zealand borrows from A in England, and the State guarantees the principal and interest of the transaction, but Mr Ward's scheme, which is wholly out of sympathy with the scheme approved by the late Mr John Ballance, is to borrow the money from A in London and lend it to B in New Zealand. carries a, contingent liability, in the other the State becomes a direct money lender, and the money oh lined for tli<' purpose is borrowed and must lie added to the amount or the public debt. The first position is by far the better one for the State to take up. Again, under the Government scheme a paltry million and a half per annum is all that can bo lent, and wh<n it is known that a little over four millions and a quarter is annually lent out on mortgage in this colony then mount- prnpoHed by the Government will bo seen to bo to;ally ;aade<juan to ur<u. the demands that are likely to • mad. for the cheap money. The result will fv that wire pulling end buck si airs influence will bo resori d to by tho-v requiring a si)are of If it i • loans to settlers to tin extent of ! T i ,300,0'H), tin re can be no wong i making the amount ton millions or | evoi twenty ( ■ . 70 11 : could should not the guarantee be given in j • i i. age is amount of 1*1,MM),000 and leuiu • tun | bu.iiuieu .jUuid uVli ? instead oi being [

an advautage there is a positive danger in the proposal, in that it will open the door to jobbery and corruption. We prefer the simple State guarantee as b-'ing belter and safer for the State, and more beneficial to the community. Assuming that fourteen millions of the twenty-nine millions odd above quoted is guaranteed by th. Government, and that the rate of interest is reduced from six to live p<e cent, by reason of the Su*u, guarantee the saving to the community of this one per cent, on £1 1,000,000 or j £1 10,000 per annum is a practical i benefit. The tone of the debate oil the budget leaves no room for doubt that the proposals of the Government will be approved, but when the bill to give effect to this portion of the policy of the Government is before the House we hope to seo it amended so as to make it oonsonant with the original scheme, as accepted by the late Premier, and which is far superior to the Colonial Treasurer’s proposal, which wo understand was framed with the view of immediately flooding t h country with money. Jiy the otiier j proposals of tho Govornmeiit fully £1,250,000 will have to he borrowed, j at any rate £750,000, if wo leave out the half million of consols. That | sum, together with what the JJ.uik of ; New Zealand must inevitably bring to ; tho colony will be ample for immediate roquii'enn ::ts, and we do not see any good reason for mangling the cheap money scheme on this ground.