FINANCE TROUBLE.

Dominion, Volume 5, Issue 1366, 17 February 1912, Page 6

FINANCE TROUBLE.

more about five million LOAN. OPPOSITION CRITICS. PRIME MINISTER NETTLED. That much-discussed financial operation, tho raising of tho five million loan of 1910, occasioned a brisk, Hough brief discussion in tho House of Representatives yesterday. The matter was first nienuonca vhc.i

• (Wellington East intimated th.at ho "would movo for a return giving full particulars of tho notation and of tho cost of tho loan, PJUArfi MINISTER roso a fow minutes later to muko a statement on tho subject. He moved to lay on tho table a return giving particulars of tho charges and expenses in connection with io?n rais , l r ng ,°f the five million loan of i • Members, he said, would remember that on ono occasion, during the previous session, he had informed them that no had not the details which ho now preS ?n r v Ho ®° r .ry to see that, notwithstanding his having made this statement, was repeatedly aasorted during tho election campaign that ho was holding back information. Ho believed that a great many people had been misled by these statements, After he had conveyed to the # House the information that came to him by cable from tho High Commissioner as to the cost of tho loan, it came as an extraordinary surprise to •In thero were gentlemen in , « cou °try saying that tho loan had | cost .£300,000, some of tliem saying that I ?, -£350,000, and implying as gentlemen the basest innuendoes *anu insinuations. He proposed to put on record a letter received from the High Commissioner, which reached Wellington on January 16, and was dated at London on December 18, and to give th« House details of the cost of raising the | five million loan. The total cost of the ; loan was .£111,816 is. Od. The Premier i then read the following return: — ! Particulars of charges and expenses in i connection with the raising of tho -£5,000,000 loan of 1910:— ' ,

JG Aid to Public Worts and La&d Settlement Act, 1910 1.750,000 A aval Defence Act, 1909 1,250,000 The New Zealand Stafco-guaran-teed Advances Act, 1909 and 1910Advances to settlers 1,675,000 Advanoeo to workers 325,000 ,£5,000,000 PAYMENTS MADE BY LOAN AGENTS. J. and A. Scrimgeou>-l per ccnt underwriters commission on -£5,000,000 ;. t 50,000 J. and A. per cent commission, obtaining underwriting 12,500 G. Street and Co. (Limited)— Advertising. and issuing prospectuses 235 A-S. Wilson and Co.—Printing prospectuses,. etc 42 Mackreli, Itaton and Co.—Law charges 103 Bank of England—Stamp duty on ,£50,000, 3} per cent, stock 312 J. and A. Scrimfj«our—Brokerage and stamp on sale of .£50,000 stock 125 J. and A- Scrimgeour—Ditto on • salo of .£141,286 15s. 6d. stock 354 Bank of England—Stamp duty on .£141,286 15s. 6d. 8} parent. stock BS3 Public Account—Cost of cablegrams, bay 114 wCC4,6*7O PAYMENTS MADE BY BANK OF ENGLAND. Ba-nk of England—J per ccnt. charge for issuing loan 12,500 Discounts allowed on prepayments in full 16,88(1 Commission to brokers and oth-

ers—i per coat, on £i,870,000 12,176 Advertising ......... 853 EngraviDg and printing debentures 69 Stamp duty on debentures 4,593 Stamps on allotment letters, scrip, postages, etc 65 j .£47,145 Total payments mado by loan agents aad Bank of England .£111,816 [Note. —The shillings and penco columns omitted from the above account for the differences in the totals.! [Copt.] Weofcminstar Chambers, 13 Victoria Street, London, S.W., Bth December, 1911. Sir,—Referring to my letters of tho 24th November and Ist December, Nos. 5756 and 5857 respectively, I now have the honour to transmit herewith the loan agents' account for tho .£5,000,000 loan raised under the Naval Defence Act, 1909, tho New Zealand Statc-euaraateed Advances Act, 1909,. and Amendment Act, 1910, the Aid to Public Works a,nd Land Settlement Act, 1910, and the New Zealand Loans Act, 1908. 'Die full amount authorised to be raised has been effected by the salo of ,£191,28G 15s. 6d. per cent, stock in addition to the ,£5,000,000 3J per cent, debentures under the loan prospectus, making a total of 15s. 6d. debentures and stock issued. The total receipts amounted to ,£5,111,816 4s. 9d,, and tho expenses to -Dili,Bl6 4s. 9d., leaving the net proceeds of £5,000,000 as authorised.

Without taking into consideration the increased indebtedness caused by conversions into 'stock of tho scrip and debentures issued under tho loan, and. which are still proceeding, or of any expenses incurred in the Dominion, the net result of tho loan is £96 6s. 3Jd. per £100 debenture or stock issued. I may add, however, that nnder the loan prospectus those applicants who paid up in full and oonvertod their allotments into stock before the Ist December, 1910, received a full six months' interest, equivalent to fivo months' unearned interest. This interest, amounting to £24,567 lis. on .£1,684.632 stock is, however, paid with tho other 3} per cent., stock interest, and does not appear in the loan account. It is not, therefore, taken into account in arriving at tho net result. If, however, it is considered as a loan expense, it would reduce the net return to .£95 IBs. 103<1., and a further pale of stock or debentures would also bo required to bring t.ho net loan prcoords to tho amount authorised—viz., £3,000,000. I may add that the amount of Btoclc sold on the 20th November was beyond the loan requirements, and a transfer will therefore require to bo niade from the loan account to the conversion aocount of ,£096 ss. 9d., proceeds of the .£713 4s. 6d. 3£ per cent, stock 'not required. This is showm in tho loan account attached. My cable of the 29th ultimo advised you that the whole of the ,£142,009 stock was 9old on loan account, but from the foregoing you will sco ("hat this is not so, though at the time I was undnr the impression that a small further sale of stock on loan account would bo necessary.

The balanoes of loan moneys were paid to the public account as follow: £669 10». 10<1. on tho 4th instant and «£fi 4s.' lid. on the 7th instant.—l have, etc., (Signed) YV.M. HAT,L-JONER. The Hon. tho Minister of Finance, Wellington, N.Z.

"ANYTHING BUT COMPLETE." Mr. MASSEY said that so far as ho had Vjvn able to follow the l'rime Minister's s.ntement, it seemed to him to bo anything but complete. It was, of course, quite right that the paper should l>o laid on the table of the House, but it eamo somewhat as a surprise. Tho House should be given a projxir opportunity of debating it after membars had had time to read it thoroughly, aud such ah opportunity should be given, if not this session, thon cortainly nest session. The l'rime Minister had not given the whole cost of the loan, inasmuch as he had not included the cost of conversion. A bonus was offered nmonnting to about or .£25,000, and this was not included in the cost of the loan, as stated by the Prime Minister. Thcro was a condition to tho effect that those who con-, yerteil from short-dated debentures to inscribed stock >11 the ordinary way before a certain date should receive a bonus of two per cent. That certainly increased tho indebtedness of the oountry to a considerable amount Had the total oost of conversion been added to tho cost U tu kaa m jdtoa ia, the ntonu ha,

thought it would be shown that those G®ntleaiun who estimated tho total increase of tho indebtedness of tho country at .KiOO.OOO wero not vory fur wrong. Ho hoped the i'rirao Minister would give the information.

W- H. HERRIES (Tauranga) eaid that ho had just looked at what the Prime Minister (-aid last year when tho matter ot tlie loan came up for discussion, lie then estimated that the net return would L>o X9(J Gs. Id. Mow it soeinod that tho amount liad com© dow:i to £95 lfis. 3d. And that is without tho cost of conversion, continued Mr. llorrios. "Of course tho cost of conversion is & dif■rent operation, Tho information was feivon us by tho right lion, gentleman en l,v H?»h n° ha(l - Rot a k,tter tell bj tho High Commissioner, aud when ill Z? a ? t °l ,ho > n bil<l amnZ H,' . Nflw , jt 6001,18 Ulot tlle n«t amount that we have received is very considerably less than the right hoi?. 10s nor an <.i a f SU, "°i Ut t,mt timc - Ev<jn ins. per .cut. makes a considerable dilloan" J'? f ' f u at this stage i • , I? Hansard for 1910 from winch Mr. Herries had been quoti'n- remarking that tho member for Tauranga Hkrh rs °- I: ° a(I tho cabl ° from tho High Commissioner, and that ho (tho Irmi o Minister) would iread it for him : dOCa not aflcct th «

|he Prime Minister; Pardon mo. I am going to stoto what is tho fact. I presumo that I am entitled to do that. The hi!?,n Ite 1 5, n 10 «Plain that in E Commissioner stated that for an amount of .£142,000 of the loan stock there was then no market. Tho net roturn of £% Cs Id. applied, to tho porTi. ' oan " len floated, and not to 1 the total Jpnount. Mr. Kerrios: I was looking at y<mf apccch in tho nest column, PRIME MINISTER AS PROPHET. Tho Prime Minister said that tho 6peeeh was based on the cable, and tho latter did not refer to tho total amount ot the loan. Here was the total amount ot the expense, given in detail by tho High Commissioner, for tho total amount °<r i oi JP' tho ooming into "J! 1 !??, 0 ' 'ho Opposition as a remote pose nmo Minister w\>nt on: And by hoavons. sir—(laughter)—they may find themselves faced by a more difficult task, if they over get there, than they bargain far! I would be supremely proud, he went on, as ho looked across to where Opposition members sat with faces wreathed'in cheerful smilea, "to opportunity of showing oomo of tlio difficulties that any men who come , here have got to deal with, and to look at performance a« against words in tho quantity that havo been talked about tho conduct of this oountry's affairs by peinle who will make a 'holy mess" of it." 'Why, Mr. Speaker," he added, "it won d make a bronze statue blush to think of the things that aro going to be done."

Mr. Masscy: The Governor's Spoech. (.Much laughter.) Sir Joseph Ward: Whenever the Opposition party is hard hit th.y all commence to laugh and grin. (H-rnrty laughter from -the Opposition benches.) Tho new members are not accustomed to it. • h. 1 ™ start 3to lall sh, generally ** -ti? mollifluous and melodious tones of the hon. member for Wairarapa T-v&ughter)—and then the laugh is joined L l * /» happy band who are around l' 1/ i? re l ETen when they got all tho details and tho names they were not satisfied. ,»^ r : • But we have not got all the information.

Sir Joseph Ward: "IvnU take an opportunity of compelling some people to disclose all the details from nil tho pigeon-holes in connection with tho finance of this country for tho pnrposo of showing what innuendo and slander can suggest inthe way of derogating from the position of a public man in New Zcaiand. I have got plenty of facts. I here has been an attempt to pull down' tho status of public life in New Zealand, and 1 do not know anything worse than tho innuendo and suggestion mado by some people in connection with some men who have heavy responsibilities upontheir shoulders. If you take the five million loan at the cost per million of other countries ours compares favourably nnd more favourably than most of them." In conclusion, ho stated that ho had taken oaro to keep .£5,800,000 of loan authorisations free, and ho had provided for tho finance of this country up to March 31 next. Ho had also made provision that the flotation for the renewal of loans was to take place only in London, and he had kept these loan authorities free in the event of changes in parties taking place. He predicted that when tho Opposition came to raise a loan they would not raiso it as successfully as he had raised his.