The Dominion. TUESDAY, APRIL 1, 1918. COLONIAL BORROWERS.

Dominion, Volume 6, Issue 1712, 1 April 1913, Page 4

The Dominion. TUESDAY, APRIL 1, 1918. COLONIAL BORROWERS.

One of to-day's cable messages gives us the substance of some com: ment in the London Observer upon Australian borrowing. Referringtq the clamour of Australia for British capital, _the Observer says that "the market i? inclined to criticise whero there is or_ has been any attempt to injure capital or raise money to injure existing British investments," and it adds that "tho market men want to know clcarly the purpose's to which Australian loans are to be applied." This note is one which has been pretty often struck lately by the London financial critics, who have special opportunities for discovering the feeling of the London money market, and it behoves the New Zealand public, no less than the Australian public, to take note of it. It was recently estimated that tho Australasian Governments will within the near future make demands, for jiewjissues and for renewals, amounting to £100,000,000. New Zealand is faced with the task of renewing loans totalling about £20,000,000 during the next five years or so—a legacy from the late "Liberal" Administration, and this is anything but a good time for colonial borrowers. For some time past the London m'oncy market has had ahead of it the certainty that with the termination of the war there will be heavy drafts upon the investing sources of England, and as a result of the increased demand for money, the price will naturally go up all round. The colonial Governments can almost always obtain rather-better terms than most nf the foreign applicants for accommodation, but in late years the demand for money for . Australasia

has been so vigorous and persistent that London loaders have begun to show themselves a little more fastidious than formerly. The extract which We quoted the other day from the Financial Jews, putting forward- tjic effect upon British investors of the chances of prohibition, is one of many straws which show which way the, wind is blowing, and it is a \vind which greatly concerns the borrowing colonies. New Zealand does not, however, ooJlie so Completely-within the scope of the Observer's criticisms as Australia doas. Merc there is nothing much to alarm the British investor excepting the chancc-a small oliance, perhaps, but one which pruinvestors must take into con<3i deration—-that the country may be forced, like Australia, into the courses pursued by Labour-Socialist (joyernments everywhere. In Australia, .however, tho Labour Governments have made a dead set at the private investor through direct assaults upon enterprises in which British capital is sunk. Who can feel surprised if the British investor (and it must never be forgotten that colonial .Government loans are open uo, and ai'e largely resorted to by, trustees), feels some disinclination to . mone y tp Governments which are in PUnclple opposed'to "hated t j? I Y 1 anc ' ,v bich in practice have ha.rshly and violently with . lfu'go private investment companies, a? Has been the case in Australia? Lhe public will perhaps remember that some couple of years ago Sir Joseph Wakd then Prime Minister) had nothing better to say to - certain criticism along the lines of the criticism of the Observer than, in effect,-that it was unfair, unpatriotic or uncoijirageous for an investor to shy .at putting his money 'at the mercy of those who might assault the investor and confiscate his money. : We .pointed out at tho time that this was an .absurd line to .take; and, in- ' deed, .as a sensible person,' -the member -for Awar.ua Would not (and ■ quite rightly) himself trust his money to .the .onejnies of private property. <" ;" '

It is not long since,' one of : the spokesmen of liho enemies of private enterprise in these'colonies said that New Zealand could dispense with Britain as a lender. They could get their money from Germany or some other country.; Now, New Zealand oould not get any money from Germany. There are 'those wjho have said, and who still say, that we can "do without Capital." A good many foolish people in the old "Liberal" party as well as in the LabourSocialist party have from time to time said, for the purposes of their immediate argument, that "we can do without .capitalists," which meatas, ".we can do without capital." "The capitalist," their argument runs, "cannot carry away the soil. If he does not; like our politics, let him go: we can do without him." But every man in his senses knows that "Hated Capital," which is your Spcialist's nanie for the mass of big and little people with money to invest, is just necessary to national life, in any country, as "Labour" is. Tho ideal New Zealand State would, be one in which the State borrowed next to nothing, but in which there would be nothing done -to deter the influx of private foreign capital. But during recent years the national debt ha,s grown enormously, and the influx of private. ! foreign 'capital (the .charge for which does not fall on the general taxpayer, but only upon its direct beneficiaries) has dried up. The Observer's comments are only the i'atest' indication that any intensification of the LabourSocialist movement in' Australasia will produce stagnation and ultimate national distress.