LOCAL BORROWING

Dominion, Volume 1, Issue 152, 21 March 1908, Page 6

LOCAL BORROWING

Taking advantage of' the greater ease in the London money market, , the Dunedin Corporation, it appears, are issuing in England a quarter of'a million pounds! worfli of 4 per cont. debentures at par for redemption purposes. Whilewe thoroughly 1 approvo not only, of municipal bodies, but the Government, borrowing locally whero this can bo done to advantage, - there are, naturally, limits to such. a process in .a young country, and we; think the Dunedin Corporation wero well, advised in applying to London for the present loan, 'and trust'that it Jvill meet with' a good reoeption. During tho last toy years the amount of money, borrowed in New Zealand, not only by ; the general. Government, but- by the municipalities, is a very largo sum. There could be no moro striking proof of the prosperity of tho Colony and the general thriftiness of tho people than that so much money was borrowed locally and converted, td a very largo extent, into, fixed capital, without causing considerable stringency in the money market. Apart'frorii the funds which tho Government have borrowed directly by tho sale of debentures, the very largo sums deposited in the Post Office Savings -Bank represent a heavy'di-ain on the amount of loanable capital. The last banking returus showed that, at longfch, theso'contmued withdrawals aro beginning to be folt. As a result, no doubt, of finding that- the deposits were r.ot expanding at tho same rato as tho advances, the i banks doing business in Now Zealand decided to raise the deposit rate. = It would .undoubtedly act as a' clog on business' should an epoch of dear money set in, and •we hope that this may bo avoided. The chief remedy at presont availablo is for the Government and tho local bodies who niay bo .wanting money in tho imniediato futuro, to seek it in London rathor than in Now Zealand.—" Christchurch Pross."