THE NEW LOAN.

Ashburton Guardian, Volume VII, Issue 2266, 29 October 1889, Page 2

THE NEW LOAN.

Tjie price obtained for the debentures of the three-and-a-half per cent. Consolidated Loan jast floated is not nearly so good as the sanguine predictions of the past week or two had prepared the public to expect, the general impression created .., these bright anticipations being that it would realise within one per cent, of par. Indeed there were some who were inclined to blame the Government for placing the minimum so low as 95, and did not hesitate to say so. As it turns out the Treasurer was evidently better advised, for a minimum of 96 would have been fatal to the success of the operation, the average price tendered being £96" 16s Bd. Twenty one per cent, of the 2£ millions has been sold at £95 83 6d, so that the minimum of £95 as nearly hit the valuation of buyers as it was possible to do. No doubt the security offered was intrinsically worth a higher figure. Those who are acquainted with the resources of the colony will have no hesitation m saying that Kew Zealand's debentures are every bit as safe an investment as those of Victoria, and if they brought what; they are really worth should fetch not only par but a premium of 3 nr 4 per cent, But the English public does not know all this, and for years past has been carefully indoctrinated with the belief that this, colony is far behind her Australian pisters, Indeed New Zealand has been the bUe noiV, the shocking example for the preachment of several financial journals, whose strictures have had all the more weight because of the depression whioh lately has prevailed m those islands. Under these circumstances then it was not to be expected that we should fare so marvelously well all of a sudden m our appeal to the English money market, but for all that we regard the result of the recent operation as decidedly encouraging. Let it be recollected that the § per cent loans of 1.879, 1882, 1884 and 1886 brought relatively much lower prices, the figures being as follow: —Loan of 1879 (issued at £97 10s) average price £97 10s ; Loan of 1882, first million (issued at £98 10s) average price £98 12s 5d ; second million (issued at £98 10s) average price £100 6s 6d ; third million (issued at £97 10s) average price £99 10s Id ; Loan of 1884 (issued at £97 10s) average price £100 6s 2d ; Loan of 1886 (issued at £97) average price £97 5,5. Then taking the recent quotations for our 4 per cent Consolidated Stock, 107 to 108, it is calculated that the proportionate valne of 3^ per cents is £93 10s to £94 10s, so that both as compared with the rates obtained for the 5 per cent loans above enumerated and with the current quotations ior Consolidated Fours this first issue of New Zealand 3£ per cents has realised a better proportionate figure. No doubt it was worth more, and ib indeed already at % per cent premium, while there is also every probability that within the current year the debentures will be quoted at epmetbingf very near par. But the fact is that these matters are manip.ula.ted by financiers who reap large profits out of such transactions, and when we are dealing withi millions we are dealing with millionaires who know as well how to work the market as professional turfites know how to woi'k a horse-race. Three things, however, may be noted with satisfaction, and these are that we have got the money required on better terms than we were willing to accept, that the result of the operation will be to reduce by £30,000 a year the colony's annual burden of interest, and that it ha,a been sh'o^rn conclijflivjily tqat m future whenever it may *|ie necessary 'to ask for further loans wejoan obtain the capital we ecpre <tf 3i inteid tji 4J or 5' per cent.