The Dominion. THURSDAY, FEBRUARY 1909. THE COUNTRY'S CREDIT.

Dominion, Volume 2, Issue 423, 4 February 1909, Page 4

The Dominion. THURSDAY, FEBRUARY 1909. THE COUNTRY'S CREDIT.

At the risk of wearying our. readers, we must recur to the central point of our recent articles upon the country's credit in>money circles at Home. We havo shown that while Sib Joseph Ward was easily ' able'in 1895 to "float' aiargo 3 per cent loan at over 94 without troubling the unj derwriters, he is satisfied to-day when he can get people to take up 4 per ,cent. bonds at 100J to 101, which' is equal to 'about 75i for a 3 per cent, loan; we showed also that the price of consols has nothing to do with the falling away of New Zealand's financial credit. The Ministerialist journal in Christchurch is still busily endeavouring to explain away these facts. In its issue of Tuesday, it attempted to answer our article of Monday without having ,bcforo it more than the concluding sentence of that article, which read as follows: ."The country's credit is still good enough, but wo cannot bolieve that it is as high as ever until we find Sik Joseph Ward securing a long term 3 per cent, loan by advertisement for £96." In reply to this statoment, our contemporary says that we "cannot reasonably expect a New Zealand 3 per cent, loan to be taken up until consols again reach mj," the figuro at which consols stood when Mr. SbDDON floated the three per cent, loan at £96 11s. in 1699. Our contemporary has apparently not learned that tho interest on consols has been roduccd to 2j per cent, since 1899, and'that therefore consols at llli in 1899 are not equivalent to consols at llli to-day. This, however, is beside the point, for, as we have shown in past articles, the price of consols has nothing to do with the real question. The point which tho public has to remember is that although the credit of New Zealand, as measured by her stock prices, has steadily fallen until Sir Joseph Ward cannot today get so high a price for i ppr cent, bonds as Queensland was able \i> get for tho 31 per cent, loan which Sir Joseph Ward thought so poor a bargain in his exultation in 1895, yet tho Prime Min- ' ISTER speaks as grandiloquently as over' of tho state of the country's finances, and grows more recklessly extravagant as the years pass.

,Our southern contemporary is delighted to, find that we admit that the country's credit is "still good enough," and expresses a childish satisfaction that The Dominion has. "sensibly confessed its fault." .; We have' no objection • to..- repeating that the credit of the country is still good.f But the point is' that it is graduallyjinking, and ;that the Pkijie Minister and; his iriends. do not show the sm'allest'inclination to realise that it is only: fa .matter of time—and it" is a ehort ; time now—before -what ie still ■ good becomes painfully .and , undiegalßedly

bad. If the present level of the country's, credit;.had been.the -general level since 1895, tho statement that our credit is still good would "mean that there was no occasion for concern at all. But the progress has been steadily downward. When man.is' steadily, walking towards the edge of a precipice, he is coming nearer and ..nearer.'.to disaster, even though the ground beneath his feet is still as "solid as it was some time previously. But only a fool would cry. out, while pushing the man .forward, that to admit that .the man, is : ground is to admit that there is no ground ; for anxiety on tho part of the poor fellow's friends. Whatever the cause, may be that "has driven down New Zealand's:credit, it is manifestly ■ unwise of the Peime Minister to. act as , if the national credit were higher' than ever. The southern journal, which apparently writes at random, declares that the-trouble is due to'the rise in the price in, money. How, we wonder, docs it'account for the fact that in February, .■JB99,::when.-:the-3"-per-''cen't; ' loan : was floated at £96 ils., the Bank rate was .3-per cent.; as it was the other day when the 4 peri cent..bonds,brought only IOOV to 101? If the price of money is the solo deciding factor, Sie.Joseph ought -to 'have.;got';over 128 i; for the,-' 4; per cent.' bonds.; He,got : .from 100 - to. 101. , \ • '"■