The Ashburton Guardian. Magna est Veritas et Prævalebit. SATURDAY, JANUARY 28, 1888. THE LOAN ACT OF 1887.

Ashburton Guardian, Volume VII, Issue 1752, 28 January 1888, Page 2

The Ashburton Guardian. Magna est Veritas et Prævalebit. SATURDAY, JANUARY 28, 1888. THE LOAN ACT OF 1887.

News comes hem Wellington that a very curious discovery has been made m connection with the Loan Act of last session. It is neither more nor Jess than this — that m the endeavor to insert a provision m the Bill while m Committee to preyent any futthct borrowing from a foreign Jep/Jer for a period of three years after the raising of the million authorised by the terms nf the Act as passed, a blunder was ;#a<ie, tb* effect of which is to prevent the pricing of (t?iy loan on the London m^;lcet other than those &uthorjsed by " The Nof ' h I s| 3Pd Main Tmok Rail • way Loan Act ib^ 4 ;" or ,, b V the Greyraouth and Wesiport n.' irbor A^eCuriously enough, the Legislature »..* s thus unintentionally fordidden the raising m London of the million which the Bill was introduced for the purpose of authorising. This, however, will not cause any inconvenience, as it happens, as Mimsteis will not require the money before Parliament meets again or for some time afterwards, and thus the whole thing can be set right next session. And even if the- money were immediately required, information is to hand that the loan could be obtained within the colony at five per cent. There would be advantages m taking that course, not the least of which would be the good effect on the London market which such a demonstration of confidence m colonial stock by colonial investors would certainly have, while after all the colony would pell on nearly as good terms. For, as against selling four per cent, debentures m London at or perhaps less, and paying brojkqrage and exchange, 5 per cents sold m the colony at par whhout brokerage or exchange woul,ej yie\d nearly as good a net result. A telegram to the " Press " from its Wellington correspondent, however, mdi XjaUiS that the Government are not likely to take tblt course /or the reason?

following : — " In the first place it would almost certainly draw out of tho Postal Savings Banks fully two hundred thousand (^200,000) now lying there at 4* per cent, so that m reality the colony would get so much less on account of the new loan, and would have to pay one per cent more for the because the sum would be simply transferred from the Savings Bank at 4 per cent to colonial stock at s per cent, and the colony would lose a year without any advantage accruing, save to the investors, who would get it at the expense of the general taxpsyer. It ip also deemed a very dangerous thing to interfere with the regular course of things m regard to finance, as the sudden withdrawal of a million sterling from the ordinary channels of circulation might prove capable of involving very embarrassing results that cannot be foreseen with certainty, but which might grievously itamper trade, while it would assuredly act as a check on investments generally, and so might impede the starting or development of local industries." The correspondent quoted, however, goes on to say that while "it is not yet absolutely decided that the experiment shall not be tried, the probabilities are against it, especially as the Government are not at all likely to be straitened for funds before they can have the accidental error m the Act rectified by the Legislature." But it might easily have beeu otherwise — that is to say, it might have been a matter of the first importance that the Government should be enabled ro raise the loan m London before June or July next, and this episode of legislative blundering is only another instance of the many of the necessity of moie careful revision before Acts of Parliament receive their final sanction.