THE LATEST LOAN.

Dominion, Volume 7, Issue 1883, 17 October 1913, Page 4

THE LATEST LOAN.

SOLELY FOR RENEWALS. : MINISTERIAL STATEMENT; THE FINANCIAL POSITION. 6IR JOSEPH WARD asked tho Minister of Finance; whether it was correct, as reported' in tho press, that a loan of three millions anil a half had been raised in London, and if so what discount the loan had been floated at, also ti-hat was tho currency of the loan and what:did tho incidental costs and charges amount to. The Hon. JAS. ALLEN (Minister of Finance) said that 'he had intended to pivo the House tho information asked for that afternoon. It was true that a loan had been underwritten in London quita. recently., The amount of the loan was' £3,500,000, and none of it was new money. The whole of it was for" the redemption of debentures that were coming due. In November next there were two loans of £100,000 coming -din. Part oF this amount would be provided for otherwise, but' th.e sum of £100,000 would be met out of the loan recently raised. The, hulk of tho loan was ,for tho redemption of a. loan coining due in' July next Year. It had been Taised at a discount of 15 frer cent., niul had returned £98 10s. per cent. The term of tho loan was ten Years, with a right of conversion into Jour per cent, inscribed stock. He anticipated 1 that the greater part of tho loan would be converted into inscribed stock before the end of this year. Tho ratc-of interest was four per, cent. Mr. Myers asked whether the conversion would be at par. Mr. Allen: No, at £101. The underwriters had taken up approximately 92 por ,cpnt. of tho loan. Up to date £173,000 of tho bonds fallins duo in July next had been paid. Mr. Resell: Aro they 3* per cent.? Mr. Allen: Yes,'they have been bought on terms giving us an advantage of 6s. lOd. per cent. They havo been bought at £100 55., but we get a full six months' interest from January 1 next. This gavo tho Government nn advantage of 6s. lOd. per cent. Mist of the amount to bo used for the purposes of purchasing loan debentures

I duo in July would be temporarily in- | vested for the purpose of redeeming that loan when it became, due. Mr. Myers: Have' you made arrangements for investment?. Twelve Millions Wanted. Mr. Allen: Temporary arrangements were_ mado for .the' investment, but I have no definite information'. The loan coming due in July amounted to £4,500,000, and hon. members would recollect thqt in > addition over three millions of the five million loan of 1911 would fall' in for conversion iu . December next year, In addition to that some small amounts were coining duo in 1914 and these, together with tho two shortdated loans ho had referred to, would have entailed upon the Finance Minister the necessity of going to London next'year for something over twelve millions of money. The Government had como to the conclusion, after carefully considering the matter, that it would bo unwise to ask for twelve millions of money in one year in London. They had therefore determined to anticipated, if they could, the loan coming duo in July, 1914.' That was the purpose for which the loan of £3,500,000 had been raised. Tho remainder would havo to he raised some time next year, before July. It had not been determined whether it would be included in the annual requirements, somewhere about February or March, but in any case, by July next, they had to find £4,500,000 to pay off' the loan then Coming due.- Ho had already told the House that tho peoplo who held the short-date debentures were not legitimate investors, but largo provincial institutions, and so on, who wajited to be paid off. The .Government had to pay them off. This applied both to the £4,500,000 loan and to the unconverted portion of t'ho five million loan coming duo in December twelve months. . Sir Joseph Ward: Does tho twelve ■millions you have referred to includc t'ho amount obtained from the Post Office ? The Annual Requirements. Mr. Allen: No, nor any amount locally Taised. Tho twelve millions included the £4,500,000 loan, a i.balance of the five million loan amounting to £3,000,000 odd, amounts totalling approximately a million falling due during 1914, and'the annual requirements for the year. What these would amount to he could not estimate accurately at the moment, but- ho assumed that it would he something like £3,000,000. Thanks to the early action it had taken the Government; hoped to bo in a strong financial position with regard to next year. Mr. Myers: What will the loan cost for tho first ton years ? Mr. Allen said that it was not very easy to estimate. Tho cost of raising the loan: would bo much 1 the same as the cost of raising the last' loan. Tho underwriting and brokerage fees would bo the .same. Tho Government had agreed that the loan should have a currency of ten years convertiblo into 4 per cent, debentures, payable in 1943 or 1963. ■' 7 Mr.' Russell said that when the honourable gentleman returned from England it was understood from a statement he .made .that • he had mado provision foT the renewal of two loans, the £4,500/000: loan, and the .remaining /balance of tho fivo million loan. 'Ho wanted to ask the Minister whether this loan! was part of tho arrangement that_ ho brought back with him from London.

Mr. Allen said that he had not'made arrangements in London, but he had brought back proposals. These proposals were now being carried out. Cost of Flotation. Sir J. Ward: When does the hon. gentleman expect to be able to give the cost of raising the loan? Mr. Allen said that he would be able to -give this information approximately in a week or ten. days. The cost of conversion would not be known until the conversion had taken place. Answering Mr. Myers, the Minister said that the last loafl cost £4 ss. 6d. per cent.

QUESTIONS AND ANBWERS. Sir J. WARD asked the Prime Minister when an opportunity would be given of discussing answers to questions. Two question days had gone by, he pointed outj without such an opportunity being given. The PRIME MINISTER: I should have thought that the answers were so clear and so satisfactory that it would not be necessary to discuss them. (Laughter.) Mr. Russell: I have got a word or two to say. Mr. Massey: I know it is impossible to satisfy my friends on the other side. Finally, it was agreed that questions should bo discussed. after the reports of committoes, had been presented. A Suggested Slaughter. Before' tho discussion terminated, Sir J. Ward said that if the Prime Minister would inform the House what Government Bills were to be slaughtered it would facilitate things very much. Mr. Massey: Too soon —I don't know that there are any Government Bills to be. slaughtered. ' Sir J. Ward: Must be some. Mr. Massey: I think not. THE DEFENCE COMMITTEE. On the motion of Mr. Statham, the Defence Legislation Committee was granted three weeks', extension of timo before bringing in its report. QUESTIONS. At 3.40 p.m. an opportunity was afforded of discussing Ministerial replies to questions, and the rtst of the afternoon was spent in this way.