WHAT THE LOAN POLICY MEANS.

Star (Christchurch), Issue 18642, 20 December 1928, Page 9

WHAT THE LOAN POLICY MEANS.

OUT OF THE QUESTION TO BORROW SEVENTY MILLIONS AT ONCE. (Special to the “ Star.”) WELLINGTON, December 19. “ As there may have been some misunderstanding regarding my policy of borrowing as enunoiated in the country, particularly in reference to the seventy millions, I wish to make it clear,” stated the Prime Minister today, that at no time have I suggested that seventy millions was to be borrowed in one year. “ A similar impression may have been conveyed in England. Obviously, such a proposal was out of the question, as it would so disturb the country that no responsible man would make such a suggestion. “ What I proposed was expending over a period of eight to ten years an amount up to sixty millions by loan to settlers, an average of six to eight millions a year, and, for the completion of five lines of main trunk railway connections, on which up to ten millions should be expended during the next three or four years. “ The public works estimate of the whole of these railways is £7,500,000. I added the extra amount for possible contingencies and the cost of rolling stock. The sixty millions was for State advances to settlers and primary producers, and promoting small settlement on proper valuations. Reproductive Borrowing. “ This is no new system,” added Sir Joseph. “It was put into operation by me thirty-four years ago, and already over forty millions has been advanced in this way, the profit on which at present stands at £1,500,000, and rerfiains in the form of a reserve fund, in addition to which there is a sinking fund. The Department has been financially successful from the beginning. Under the whole of the proposals for the two purposes above named there is no taxation required, as the cost of the money is paid entirely by the settlers who borrow, and by the working railways when they are completed as a productive asset. “ In addition, the whole borrowing proposals proposed by me do not amount per annum to the average amount the country has borrowed during the last three years. “ There has been so much misrepresentation on the matter that I feel that it is due to the British investors who have always treated this country well that they should not assume, without proper information, that there is a policy of extravagance inaugurated. “ I wish to state definitely there is no intention on the part of the Ward Government to abuse either its powers or credit.”