The Star. WEDNESDAY, NOVEMBER 1, 1911. THE LOAN POLICY.

Star (Christchurch), Issue 10298, 1 November 1911, Page 2

The Star. WEDNESDAY, NOVEMBER 1, 1911. THE LOAN POLICY.

We are not greatly enamoured of the Government's borrowing policy, but it is perfectly clear that tho progressive measures for tho settlement of lands, the assistance of public bodies and the encouragement of workers and settlors anxious to acquire holdings and to develop them could not bo carried out without going to tho money market. If borrowing of this class were not done through the Government, it would be done directly by farmers ami' local bodies, and the effect of the Government's intervention is to provide cheap money by giving tho lenders the additional security of a State guarantee. It is clear, also, that the alternative to borrowing for public works in the past would have been the encouragement of private enterprise, the leasing of railway and other public concessions to privato companies, and under that policy important development works that could not earn interest directly would have been left unconstructed. Our own objection to the present loan system is concerned partly with tho size of the borrowing, but more particularly with the manner in which the money is distributed and spent. But that is another story. What interests us particularly at tho moment is the attempt -that is being made by the Conservatives —it is made every three years—to distort and misrepresent tho policy laid down by the Liberals under Mr Ballance Twenty years ago. The Tories' contention is that Mr Ballance's Government was opposed, to all borrowing, and that the present policy of the Liberal Government is an, entire reversal of Mr Ballance's views. Misrepresentation of thus sort is best met by guoting Mr Ballance's own words, from which it is clear that ho regarded tho cessation of borrowing as a temporary requirement, rendered necessary partly by the condition into which the colony had fallen under Conservative administration, biki partly by the heavy borrowing that all tho colonies had indulged in. This is what Mr Ballance said when speaking on the Financial Statement of 1891: We hare come to this conclusion: that borrowing in. tho English moneymarket in the near future would be a dangerous operation and a suicidal thing for the colony to venture upon. We bolieve our safety absolutely depends on not going into the English money-market for loans for a certain number of teaks. We believo that any present attempt to borrow would place us in the same unfortunato position held by Queensland and Victoria recently, and that must bo the position which any colony will bo placed in that goes borrowing for the next raw ye Aits. The Liberal Party in 1891 did not contemplate the permanent cessation of borrowing. Mr Ballance himself said on more than one occasion that circumstances might at any time warrant a departure from the policy lie had adopted. His concern was to restore tho credit of the colony and t-o place the finances on a sound basis after years of inefficient administration and indifferent control. Ho succeeded, and tho magnificent work lie and his colleagues were able to do laid the foundations of tho present prosperity of tho dominion and enabled their successors to carry out a bold, well-conceived and well-administered policy of developing the resources of the country.