A TRANSPARENT PRETENCE.

Wanganui Chronicle, Volume XXXVIII, Issue 11952, 2 April 1894, Page 2

A TRANSPARENT PRETENCE.

LENDING MONET TO EARMEKS AT 4} PER CENT. The attempt on the part of the Government to justify the borrowing proposals they are compelled to raalte is a very open subterfuge, capable of euliing none but the very stupid. The Government, through the banqueteering aad other speeches of the Premier, say that it is necessary for them to go to the London money market for cash to lend to farmers at 4i per cent. This can be shown to be pretence on the clearest evidence, that, namely, famished by tbe actions of the Government themselves. They are already large lenders of money to farmers. For this money tbe Government charge from 6 per cent for loans from JJBOOO down to .£IOOO, from the latter sum to .£SOO they charge 6i per cent, while for loans below •6500, 7 per cent is charged. Further, in arranging loans at these rates, the amount lent is never more than equal to half the value of the security. Tho rates charged are either too high, or they are fair, taking intoaccountthe market value of money. If they are fair, and the Government propose to lend at lower rated at the expense of the colony, the project is only a gigantic cheat disguised under another name, and those who support it are political rascals, who ought to be driven from public life— into gaol if possible. But, supposing the rates at preaont charged to be unfair (as must be assumed by those who favour the proposal that the credit of the colouy should be pledged in order that the Government may lend at lower rates) by that very assumption, the Government stand condemned .as usurious cheats, trading on the necessities of impoverished borrowers, and, therefore, quite unfit to be trnsted with the further expenditure of public moneys. But there is no need to pin the Government to this line of reasoning, logical and uncomfortable though it be. They do not want borrowed money to lend to farmers. This is only a false pretence. They want money because they are practically insolvent as an Administration. They cannot pay their way. Treasury bills and other floating iudebteaness. close upon two millions of pounds, stand in their path. Other forms of borrowing (including the ingenious political fraud of issuing postal notes with no time fixed for their redemption), which must be disoussed when Parliament meets now blocks the financial way. It is a case of borrow or collapse, and therefore any excuse for borrowing ia good enough, even if it be as false as Satan. The Government are a spendthrift combination They inherited a substantial surplus, and have converted it into indebtedness totalling altogether three million sterling, and must have money to carry on with. In fact, even if they were superseded by another . Government there would still have to be a loan, for owing to reckless financing the colony is face to face with the most serious state of things that has confronted it for many years. But th« Government dare not state the honest facts— or the facts honeßtly, whichever be considered the most appropriate way of putting the question. They have so beguiled their followers by unfounded claims to surpluses, and have made so many unreliable statements about the financial position of the colony, that to utter the plain trikh would be to stamp themselves as the veriest political impostors known to the history of the past ten years. And they naturally shrink from that, while at the name time, still a pray to the only ruling principle they appear to be cursed with— the determination to stick to the sweets and the patronage afforded by office uutil kicked from it by an indignant Deople. A few words as to the impossibility of tho Government ever inaugurating a system of lending at 4J per cent will commend themselves to all capable of thinking clearly. The money we have spoken of as lent by the Government at the ratea quoted, comes from tbe funds of the life insurance department chiefly. It is in this mannar that life insurance is possible. The premiums paid by insurers are lont out at interest, the interest is again lent, and thus it is possible for claims to be paid at maturity by death or (-fluxion of time Now, if it be necessary to charge from 6 per cent to 7 per cent on such moneys, we have hero the best possible proof that the Government would be robbing the colony and injuring the prospect of insurers by lend, ing at !gm. But apart from the ntcessity of the department charging from 0 per cent to 7 per cent, thu fact that such prices are obtainable while a 50 per cent margin of security is bargained for, show that thesfl are the lowost current rates at which money can be borrowed. For the Government thereforo.to lend National funds at less than those rates would be to rob the many to benefit the few. It would also tend to injure the thrifty, for if the Government lent public moneys at 4J pgr cent, it is quite evident that bonuses to insurers in the Government office would ■-ease, and that tbe taxpayer would be in addition called upon to make good, looses sustained by the insurance office having to pay claims calculated en a rate of interest for money that could no longer be obtained. But nobody need be afraid. The pretence that borrowed money will be re lent ot lower rate 9of interest is pure humbug, All the millions that the Government may get hol«l of will bo squandered, as have been those already spent.— Waipawa Mail.