The Southland Times PUBLISHED EVERY MORNING. Luceo Non Uro. SATURDAY, OCTOBER 24, 1925. THOSE WAR DEBTS.

Southland Times, Issue 19690, 24 October 1925, Page 6

The Southland Times PUBLISHED EVERY MORNING. Luceo Non Uro. SATURDAY, OCTOBER 24, 1925. THOSE WAR DEBTS.

In justice to ourselves and to Sir Joseph Ward we must refer again to the question of the funded war debts to which he made reference in his opening meeting at the Municipal Theatre, and to which he again referred on Thursday night in commenting upon our correction of his statement. Sir Joseph Ward says that we misunderstood the position. We do not think we misunderstood his statement, which we quoted in full, and in that statement there occurs twice the declaration that under his arrangements New Zealand paid for the maintainance of her troops in the field, and that the Ministers wefe entirely wrong in saying that we still owed the Home Government for this charge. On Thursday night Sir Joseph Ward seemed to take another line, for he declared that loans were floated in the Old Country to pay the people to whom we owed money. In other words, our indebtedness under this heading was funded and saved the country some money. Of the advantages of funding the debt there is no question. The point we made was that it was entirely incorrect and gave an incorrect impression of the real position to say that New Zealand had paid her war expenditure. On Thursday night Sir Joseph Ward said:—

What I take exception to is the fact that two Ministers of the Crown recently said that they had to find the money to pay the country’s indebtedness for the war when I had funded the money owing to the British Government. As a matter of fact, the funded loan cleared the whole matter up and what I did therefore I claimed was right. It is clear, then, that the debt was funded and, if it was funded, the two Ministers were entirely right in saying that we have to find the money to pay off this debt, and, as a matter of fact, this country is finding the money and has already paid off about £1,000,000 under the funding arrangements. No amount of arguing can alter that fact any more than it can be said that the issue of Government stock for the building of railways or for any other purpose does not constitute a debt which ultimately has to be met. That it is not necessary to go on the London market where stock is issued in these cases is perfectly true, but there is always present the danger in the manner , in which Sir Joseph Ward has presented his

case in connection with the issue of Government stock, that the electors will consider that in some mysterious way the issue of stock obviates borrowing. It is really another form of borrowing requiring the payment of interest, and where contractors know that they must discount stock in order to get their money they will undoubtedly make allowance for that when they tender for contracts. We do not make this point in any carping spirit, but we think it is necessary to clear up the situation created by Sir Joseph Ward’s original statement which followed upon a declaration that the incident to which he referred in connection with the War Debt of £26,000,000 was an evidence of the need for the presence in the House of a critic with a knowledge of finance. We suggest, and we think we have shown beyond dispute that this statement was no evidence of this and that it did not put the position fairly. Sir Joseph Ward’s subsequent reference to the matter has not entirely cleared the air, but we think that it has gone far enough to enable us to say that we did not misunderstand his statement in the Municipal Theatre on Monday night.