Our Financial' Burdens and How to Lighten Them.

Taranaki Herald, Volume XLIX, Issue 11818, 15 November 1901, Page 1

Our Financial' Burdens and How to Lighten Them.

MR ELL AT INGLEWOOD

Mr H. G. Ell, M.H.K. for Christchurch City, delivered an interesting and instructive address in the Parish Hall, Inglewood, 6n Tuesday, November 12th, the subject being "The Financial. Burdens of the New Zealand Taxpayers, and How to Lighten Them." A large gathering was not expected on account of the

short notice given, but the hall was comfortably filled, which was gratifying 1 alike to Mr Ell and the energetic committee which had worked the meeting tip. Mr C. Leech occupied the chair, and in his opening remarks referred to the great pleasure it gave him to welcome, ott behalf of the residents of the district, such an energetic and worthy representative as Mr Ell had proved himself to be. He was also pleased to note that the ladies of Inglewood were well represented, which seemed to indicate a desire on their part to know something of what is certainly one of the leading questions of the day ; this desire was commendable as it would enable the ladies to exercise their votes in the proper direction. Mr Ell, who was received with applause, said although the subject he proposed speaking on was of a dry nature it was, nevertheless, a very serious one, and one that should be studied carefully by the taxpayers- of the colony. The puWic debt and annual interest chai'ges \vere being piled up at an alarming r".a.te, and the people were not doing, their duty in allowing this to continue. The interest charges on our public debt now swallowed up one-third of all revenue derived from taxation, and the total amount paid in interest in 26 years was £40,000,000,, which did not reduce the principal one penny. The speaker dial not advocate the stoppage of public works ; on the contrary, these should go on, but he urged that candidates at the next election should be pledged to stop borrowing, as it was not necessary to raise .money in that way. The remedy Mr Ell suggested as a means of reducing this load of debt was. that' the State should assume control of our currency. He considered it traitorous to the country to suggest that the State could not undertake its own banking. The Life Insurance Department, Advances to . Settlers Department, and Post Office Savings Bank had been a success under State control. And what had. been done with the Bank of New Zealand ? It was, under State appointed directors, and backed by a State guarantee, and had prospered under that management. In referring to the popular idea that there is gold at the Back of every note Mr Ell said that the coined gold in New Zealand was £2,825,528, and the banks had cash deposits of £16,027,344, and, the Post Office Savings Bank £5,663,383, total cash deposits of £23,690,727. All the gold in New Zealand to meet this was £2,825,528. Between the Bank of New Zealand and Post Office Savings Bank the free deposits amounted to £8,895,266, yet in gold the two banks ha,d only £870,000 between them, a deficiency of £8,025,266. Mr Ell dealt at length, in an interesting manner, with the subject of paper money in various parts of the world, and explained ' causes which led to its depreciation. He did not advocate an unrestricted issue of paper money, but advis'ed ; that the State Bank should follow the usual banking methods, under which the banks created credit in favour of business men and local bodies, and alslo in favour of the Government, and these credits were operated on in the usual way by che^ques 1 . While these cheques were passing it was so much more currency 4n circulation.' Under this method the Bank of New Zealand had created credit in favour of the Government, for the Advances to Settlers Department, to the extent of £230,000 temporary advance. This plan did away with the necessity of printing notes to the full extent" of' the money lent (the old plan). The cheques under this method' were pure currency.This was pure credit,' made by the 1 banks, and on which the Government were charged • interest. r If the private banks could do this, could riot the State do it ? Of course it could, and thus save the interest: Between 1895 and 1901 the Bank of New Zealand created credit on Treasury Bills, for which the Government had paid in interest Hlie sum of £234,485. The speaker said that this vast sum of interest would have been saved to the people . if a State Bank had created this credit instead of a private one. With a debt of £60,000,000 and still increasing, and more money wanted for necessary public works, was it not better to make our own credit and thus save the interest, than to borrow it and thus create a heavy burden of debt for those who are to follow us. Mr Ell concluded his able, address by stating he- would - b,e._glad to answer any questions to the best of his ability. The Chairman expressed the hope that the meeting would not let Mr Ell leave without putting questions to him. There were lots of people present who could ask questions at the street corners, and now they had got a man here who could' answer these questions he hoped they would take advantage Of the opportunity. Mr Herd asked' the reason why the Austrian thalpr depreciated. He had travelled in Austria, and found inconvenience and loss through depreciation when travelling from one district to another. • ' -- Mr Ell asked if his questioner could tell him whether the thalor was full legal tender , if it was not that was quite sufficient reason why it depreciated, for when paper money, was deprived by • law of part of its legal tender quality.it depreciated, and gold did the same. Mr Herd < could not remember if such was the case. Mr Frornru said the. thalor was not a full legal tender ;. it was merely local money, and had to pay exchange when going from one district to another. Other questions were asked and answered satisfactorily. Mr Sawle moved tiie following resolution :— " That in view, of the alarming increase of our public debt and of the consequent burden of interest, this 'meeting is of opinion that the Government should assume the State function, Qf banking and the sole right to issue bank notes." Mr Sawle spoke strongly in support of his T resolution, aud pointed out the utter absurdity of the belief that such a vast amount of currency as was^required for the commerce of the world could bo backed by such a small stock of gold, l Mr R-Old seconded the resolution. Mr H. Trimble thought it would be wise to consider well before carrying this resolution. He considered it practically meant an unrestricted issue of paper money, and if adopted by the State would lead to disaster, as it had, done in other countries. He " instanced cases where paper money had depreciated, and the countries add returned to a gold standard T ■ ' , \ Mr Ell, in reply,,, said there was absolutely nothing in what Mr Trimble said, because he (Mr Ell) never advocated art Mnfesti'icted issue of notes. He simply, wanted the State to assume the function of banking and the sole right tto issue notes, instead of paying- a private bank to do so at' a cost to. the Government of .4£ or more per cent- He knew paper money had depreciated, and said so in his address," and .also gave reasons why it had done s,a, but the plan he proposed would prevent this. The Chairman then put resolution, which % was carried almdst unanimously, only, one voice being raised against: it. ■ Mr B. H. Nichplls proposed a hearty vote of thanks to Mr Ell for his very, able .qnd Instructive oa'^resSj " '.

Seconded by Mr H. Brown, andt carried with hearty applause. The Chairman raised the question of forming a State Bank and Currency Reform League in Inglewood, whose object would be to work for the reform of the currency aritf thefurtherance of the object expressed in the resolution just passed. A number of names were given in, and a meeting is to be called soon to take the initial steps. In returning thanks for the hearty vote of thanks accorded him, Mr Ell said he' was greatly pleased to meet an Inglewood audience, and at the patient ho., ring they given. Pie intended holding meetings through tho South Island, as he considered the question one of the most important in practical politics.