DOMINION'S FINANCES.

Star (Christchurch), Issue 11216, 23 October 1914, Page 5

DOMINION'S FINANCES.

LONDON ARRANGEMENT. BANK OF ENGLAND ADVANCES. VERY FAVOURABLE TERI& (Special to tho. " Star.' ) WELLINGTON, October 2.'t, An important statement in regard to tho finances of tho Dominion wus made in the Ifouso yesterday afternoon Itv tho Minister of Finance (tho Hon .'). Allen). Mr Allen, in the first place, referred to tho operations of the State Advances Department Tho maximum amount of advances to workers, which had stood at £350 &iiice the outbreak of the war, had, ho said, been raised to £IOO. He did not know whether it would bo possible later 011 to restore the limit to tho sum of' £450, at which it stood prior to tho war, but a considerable amount had boon paid out to workers oven under tho £350 limit. The increase now made would, ho hoped, do a great deal to provide work for unemployed carpenters. In regard to loans to local authorities, Mr Allen pointed out that provision bad been made in the Public Works Estimates for various pound tor pound grants. Unless the local bodies were enabled to raise the amount of thoir share of theso items of expenditure, they would not bo able to avail themselves of the grants. It had therefore been decided to make advances to local bodies up to £IOOO. This was not a largo amount, but it would enable the local bodies to avail themselves of nearly all the pound for pound grants 011 the Estimates. It would probably be possiblo later 011 to increase the amount.

TREASURY BILLS IN LONDONMr Allen said that bo had been in communication with the High Commissioner in regard to tho loan falling due in December, as well as the Dominion's current needs. He was advised that under present conditions it was not at all possible to raise either stock or debenture loans in London. All that could be done was to arrange for immediate requirements througn tho issue of Treasury bills. Ho had already, before tho war commenced, obtained power to issue Treasury bills in London, and by this means it would be possible to provide not only for the loan falling duo in December, but also for the requirements during the year. Sir Joseph Ward asked how much had been advanced to workers under the reduced limit. The £IOOO limit for local bodies would be very valuable to some local bodies, but to others it would be of no use at all.

iVlr Allen : It is better than nothing. Sir Joseph Ward said that the carrying on of local public works was perhaps more important than that of the i'ublic Works Department. He asked how much money had been advanced ou Treasury bills in London and what rate of interest was paid. Person ally ho had never known any difficulty in raising money in London. iUr Nosworthy (Ashburton): You have never had a time like this.

Sir Joseph Ward said that his experience was uiat there was no difficulty in obtaining money in London so long as the borrower was prepared to pay for it. Mr Allen: What, rate would you go up to? Sir Joseph Ward: 1 should keep # has low as possible. If I were making; a statement to the House about it I should say what I was paying.

LAST MONTH'S ADVANCES

Sir Allen said .that lasjf"month,,;the amount paid over.to borrowers froK> the Advances to Settlei-s branchy was £108,960: from tlie public, debt sinking fund branch there was paid over £6IOO, and under the advances office sinking fujid account there was paid over £21,230. The amount authorised by the Board for tho month of September was £38.165.

With regard to advances to workers the amounts paid over with the restriction down to £350 wa5.£30,135, and tho amount authorised by the Board wa~ £14,740. Advances to local bodies had been temporarily stopped meanwhile,but tho amount paid over for the month to local bodies was £26,325; under the advances to local authorities account and under the office sinking fund account £247 0, and under the public debt extinction fund account _ £2480, The amount of loans authorised during the month was £4500. ADVANCES BY THE BANK OF ENGLAND. "

In referring to the Treasury bills isr sued in London, Mr Allen said that the only advances that the Government had received, from London wero £400,000, and they were for the war fund account under the War Loan Bill- This money had not been , secured from speculators. It had been advanced by the Bank of England at a rate of interest that he was not at liberty to disclose at the present momentMr Mvers (Auckland West) paid that iu Australia it had been announced that the rate at which die Australian loan had been obtained was 5} per cent. Mr Allen (laughing): I am not going to say New Zealand is borrowing at 5-i per cent, because that is not trip rate we aro paying. lam not going to disclose, tne rate, because I am asked by the Imperial authorities to keep it secret, the reason being that the terms are exceptionally favourable. These advances, ho continued, wero Treasury bills for sis months. They would be met out of the war fund, which the Imperial Government was going to raise, for it would raise enough to furnish to New Zealand sufficient to return the advance made by the Bank of England. It was highly gratifying to him to be able to report to the House iVe very satisfactory arrangements that /nd been made. He ventured to soy no other Dominion had made more satisfactory arrangements. He might even go further than that.