THE NEW MILLION LOAN.

Poverty Bay Herald, Volume XXXIV, Issue 11129, 31 July 1907, Page 1

THE NEW MILLION LOAN.

SATISFACTORY FINANCIAL ARRANGEMENTS.

CRITICISM FROM THE OPPOSITION.

(From our Parliamentary Reporter.)

WELLINGTON, this day. The. second . reading of the Loan Bill was taken in the House yesterday afternoon,, when the Premier explained that there was a difference in the schedule of amounts to that of last year's loan, but he pointed out the schedule did not disclose what the final apportionment of votes would be. With the present loan proposal the Government would have £2,115,800 available for public works expenditure- as against a total expenditure last year of £2,040,319. The amount obtained in the colony of last year's loan was £659,600 and that obtained in Australia was £340;500. The total amount actually received was £1,006,800. As regards the million loan which was now asked for, he would, for the information of hon. members, say that he had already received, an offer for the whole million I loan at '4 per cent, at the premium he had named of 2 per cent., but with an additional charge of 1 per cent, brokerage. Tlie offer was received from out-side,-and the term was 15 years. He had therefore refused it as h© had reason to believe that he could obtain ha_i tho amount outside the colony at 102 and brokerage of £ jier cent. There) were important transactions to be carried out this year, and it was satisfactory to the colony that such arrangements could' be made. .' Mr Jas. Allen (Bruce), criticising the finance of tli© colony, said he thought tlie time had come when they should be. able to raise, a loan at less than 4 per cent. The Premier : Some of the important colonies have had to pay 5 per centl Mr Allen declared that the colony, the Premier 'had boasted only a few years ago, eould stand- a loan of three millions; then they should be able, to obtain money outside. at 3£ per cent. ' ' The Premier : Why not congratulate the colony at doing a very fine tiling for once? Mr Allen : Borrowing outside at 4 percent. I cannot. If it was raised at 3£ per cent. I would. Proceeding, Mr Allen dwelt upon the necessity for an amendment of the Public Revenues Act, and afterwards went" on to criticise the alterations to the schedule, which he said meant that v roads and railways to the back-blocks were to be roblJed for additions to open lines and to rolling stock. It was time the colony knew whether the whole cost of new materials used for renewal were charged to revenue, as it should be. He admitted that the Government had done a great deal to readj list charges which should have been charged against revenue since it lmd come into office, but there was still a jot more to be done. He questioned the action of the Government in committing the colony to a contract for £500,000 for the construction of. the Arthur's Pass tunnel, when "such an important work as tlie Slain Trunk line was still uncompleted, and when the Otago Central line vote had 'been cut down as it was last year. The Hon. .Mr McGowan, acting-Minis-ter for. Public Works, took up the question of expenditure of loan moneys, and declared there was hardly a member of the House who had not asked for a vote for publio works, whilst deputations had attended upon him almost by the hundred. The Minister went on to defend his policy of development ofs goldfields, declaring that the colony had never had a Minister of Mines who had, such a knowledge of goldmining or took, such an interest in the industry more than he did. The rate of expenditure, he went on to show, was higher than that, under previous Ministers.

Mr He'rries said the action of tlie Minister should not be viewed from-, the amount he had spent witli previous years, but of the actual amount expended compared with the money voted. All that they asked regarding mining waa that the money voted should be expended, not thrown away. Prospecting, for instanoe, had not been encouraged 1 as it should have been. The member for Bay of Plenty went on to review the flotation of loans, acknowl edging that the Premier liad taken .the right course in raising their loans in the colony, in view of the recent experience on the London market. He> however, agreed with Mr Allen that it was unfair tliat the Post Office 'should have taken up a large portion of the last loan at 3£ per cent, and- the conversion of other loans at from 3 to 3£ per cent. It was unfair to those persons who invested their money in the Post Office. He also declared that from the schedule of the Bill it appeared the back-blocks were being penalised for works in more settled districts.

The Premier interjected it was not so. _Mr Hemes added that the allocation did not give them much hope ifor the Publio Works -Statement. He was very jealous about the Public Works fund, and was anxious tliat it should not be diminished. "

Mr Laurenson expressed surprise at Mr Herrics' statement regarding the Post Office funds. Was it not a good thing for depositors to hav.e their savings invested in a way that gave absolute security.

Mr Hemes explained that he had no objection to al portion of the Post Office Savings Bank funds -being invested in Government debentures, but what he wanted! to know was this, was it legitimate policy to pay individual holders of debentures 4 per cent, while the Post Office Savings Bamk liad to be content with o_ per cent. Mr W. Fraser was glad the Government had reversed its policy of these abominable short-dated' loans, and had gone back to those extending, over 15 years. He thought they would 6hortly go to the London market for cheap money, and was bound to sa~ the Premier would take the opportunity of obtaining his loan in the cheapest market. Mr. Hogg declared he would give tlie Bill his heartiest support. He had totalled up the wants of his district to a little over £5000, .and; if the whole of the members were as reasonable it would make the Minister's life much easier. He : noticed that money was to be equally divided between roads and railways, which he' was pleased to see. He declared money could be spent more profitably than in land for settelment. Last year the 300 new settlers had cost £2000 apiece; He did not say there should be no such expenditure, but it should be kept within moderation. Tlie Government had spent a considerable amount on railways, but he hoped t\\ey would spend more on roads and bridges. He deprecated the policy of pushing on so many lines in the colony at one time.

Mr Barber declared tliat the completion of the North Island Main Trunk line necessitated an extension of the South Island Trunk to Picton to lessen the se» journey between the two Islands. Mr T. Mackenzie wanted to see a number of smaller lines undertaken on completion of the Main Trunk line. He advocated the laying of narrow-gauge lines, which could be constructed cheaper than macadamised roads

The debate continued in an uninteresting manner tliroughout the evening, discussions mainly centreing on railway and road construction in various parts of the colony. Once more the House had to fall back upon the strong sense of wit from the member for Ashburton for "a little diversion in a somewhat weary discussion. After rambling on about various subjects and asking the wealthy members of the House why they did not contribute something to the Colonial Treasurer to buy up these finances of the colony, he added that he was the poorest of the lot, he supposed, because he .was the most generous. At length he demand, ed from the members near him what was the subject before the House, and learning it was the Loan Bill, Mr McLachlan remarked: "Don't iborrow," addressing the Premier,. "If you will take my advice, don't borrow, but economise. Tlie trouble when you borrow is that "you have to pay back. The time may come wlieu you cannot pay back. Don't borrow. That is my speech' in one word." The speeches of other members on the whole were mostly confirmatory of the policy of borrowing for development of the country. Numerous local grievances were expressed and placed' on record At midnight the young member for Westland, Mr Seddon, was replying to criticism directed at the decision of the Government to proceed with the Arthur's Paas tunnel, a work which he declared was of national importance and members •should rise above parochialism. The Premier replied at 1 o'clock, and tue House rose at 1.20.

Replying to criticism on tlie million loan debate, at an early hour this morning, the Premier declared that if they adopted the suggestion of Mr Allen regarding the post-office rate of borrowing at three per cent., to retain their deposits the banking institutions would have to com© up to the four per cent, level. Every leading institution would immediately have been affected, causing a tightening of the money market, and, perhaps, a financial panic. At three per cent, the loan would have cost £140,000, and it meant they would only have got £860,000 for their million. Regarding railway construction, he strongly commented on the extraordinary provincialism of tlie cry raised, North v. South. Tlie Midland railway was authorised twenty years ago Tho colony had been providing large sums yearly, and now that it wa* near completion tlie Government would not allow it

to remain in its present unremunerative condition. The second reading of the LoanJßiU was carried on the voices.