MR WESTGARTH'S PROPOSALS

Ashburton Guardian, Volume VII, Issue 1949, 20 September 1888, Page 4

MR WESTGARTH'S PROPOSALS

The news sent by the Press Association on the Rubject of the visit of Mr Westgwtb, the bead of the YreUknovra London firm of financiers, is of the greatest possible interest. It appears that the object, or at anyrate one of the objects, of the visit of that gentleman, trho is now m New Zealand, and who has already visited the other colonies of the Australasian group, is to effect an arrangement whereby all ♦>: _£otaai l°ansjnay a be n £- orfl fftVorftble footing. 'xSese loans have been raised at various times and at varying rates of interest, ranging from 3£ to 6 per cent or evon more, and Mr "Westgarth has submitted proposals to the different Governments, which if carried out would convert them into Australasian 8 per cent stock, the several colonies to agree that hereafter all future loans shall be issued upon debentures bearing only that rate of interest. This latter proposal could be carried out without the con eolidation of existing loans into general Australasian stock, eac'i colony remaining solely responsible m respect to its own indebtedness, and, failing the carrying out of the larger scheme, would be eminently desirable. But if the larger j proposal can be given effect to, then uu- { doubtedly tho position aud value of all Colonial loans would be immensely improved, and the burden of interest would at the same time be considerably reduced. Nay, more, there would be every reason . to hope for the passing of an Imperial measure enabling trustees to invest m consolidated Australasian stock the security of which would be undeniable. This of course would imply the joint and several responsibility of the colonies, and it mr y perhaps be urged — nay, it has already been urged, as an objection to the feasibility of the scheme that while those whose credit is weakest, such as rvew Zealand and Queensland, would be gainers those whose credit is highest, such as Victoria especially, would inevitably be losers, the former being levelled up and the latter levelled down to the mean which would represent the - value of consolidated stock. This objection would no doubt be valid and must prove fatal to the scheme, were it not that the effect of pledging all the resources of Australasia as security for the several loans would certainly have the effect of placing that stock m such a position as to enable it to command values m excess even of Victorian stock alone, and we believe that the difference would be large enough to more than make good the depreciative effect of the amalgamation with stock which per se rates at a lower value on the world's ex • change. On the whole then we are confident that while the colonies whose credit is weakest would gain largely, those whose credit is strongest would certainly not lose, but would probably also gain, though m a less degree. We heartily approve of Mr Westgarth's suggestion, that m future Municipal bodies and Harbor Boards should not be allowed to place their loans direct on the London market, but that the money required to be raised, if raised out of the colony, should be raised for them by the Government of the colony. Necessarily and naturally we approve of 'this because we have over and ore* again urged the self-same thing. We believe that Parliament would be much more cautious m sanctioning the raising of money for municipal or harbor purposes if it were the case that the colony were to be m the first place responsible, while such loans as were Sanctioned would then be raised on much more favorable terms — a colonial 4 per ; cent, loan usually realising as much as a 6 per cent, local loan. Roughly, speaking the charges upon local cate" payers would thus be something like S3: per cent, less than they now are m Tespect of borrowed money — a very, appreciable 'measure of relief. Indeed we hope that Mr Westgarth will see his way to somewhat extend his proposals, and include the consolidation as coloni»> stock of all the existing local hthe Colonial Governments to - yflI J Sj necessary Acts, taking *»- ass for recourse to local t** s le P owers ment of interest - m S for tho P ay " then without lf tbis were done » ever tb«> ' any necesßar y I°sb \»batYtQifl* - difficulties of many localities ..a be minimised if not altogether removed, and nobody, to quote Ingoldsby, need be " a penny the worse." It is very satisfactory to find such proposals as these emanating from such a quarter, and although Mr Westgarth is, of course, taking the thing m hand as a matter of business, he nevertheless will deserve the thanks of the colonies if he Bucceed. Whether or not, his visit will certainly be productive of good results, for we are pleased to observe that what he has seen so far (and he has yet to see the South Island) has given him the most favorable impressions of New Zealand. Speaking to a reporter of the <f Evening Press" (Wellington) he is said to have "declared, with some enthusiasm, that he was charmed with what he had seen of the colony up to the present time, Auckland, New Plymouth, Nelson, and Wellington had struck him and his family as being each beautiful m its own way, and each having variety enough to delight the traveller independent of the ctheip ; and the climate appeared to be most delicious. ' Our impressions so far are of the most favorable kind,' ho " observed ; 'everything, m fact, far surpasses our expectations. You seem to want nothing but population, and that you certainly do need. Though matters are said to be dull, I don't see any notable evidences of bad times. The laboring classes have high wages, and comfort on every side. Of course you have a heavy colonial debt, and a good deal of privato obligations; but on the whole I think that everything appears to be getting on very well indeed.' " It is also satisfactory to learn from so unquestionable an authority that New Zealand is recovering her position m the confidence of the Home money market. Upon this point Mr Westgarth says : — " The general idea is that you are overwhelmed with obligations for borrowed money and that sort of thing ; but along with that there is also the feeling that you must come through it all right. Your securities, as you are aware, are lower than those of any other colony of the Australasian group, and there is a good deal of distrust amongst the quiet old women who prefer British Consols to anything else. Bat there is a very good feeling indeed on the Stock Exchange. It has, of course, been considered that your colony brings out too many loans, bat since you have undertaken not to raise another for three years, the attitude \$ bqw one of confidence," Altogether

Mr Westgarth's visit is likely to increase I public confidence both here and m England, and will, we believe, yet bear most excellent fruit. [Bince the above was penned we note that Mr Westgarth has had an interview with the Premier, and has "strongly! recommended him to re-arrange tho ' Harbor and Municipal Loans of !?*«' Zealand so as to m»W tliem mto colonial Btoofr. --* m the re-arrange-W er>*- ~r tnese and the general stocks to bave one uniform percentage of interest, viz , 3 per cent." This is m accord with the suggestion wo hnve ourselves made. — Ed] .