The Evening Star SATURDAY, JULY 1, 1876.

Evening Star, Issue 4164, 1 July 1876, Page 2

The Evening Star SATURDAY, JULY 1, 1876.

Further particulars of the provisional arrangement for the inscription of New Zealand debentures by the Bank of England made by the Premier during his recent visit to London are given in a Parliamentary paper just laid before the Assembly. The subject of the inscription of stock, although it has but recently ccrue prominently before the public, is not a new one. The merit of originating the idea is due to Mr Westgartii, who for a long period, • but with little success, has been urging the Colonial Governments to adopt a plan by which, from time to time, Colonial debentures could be registered and made not transferable to bearer. The Ministry of Victoria, two or three years ago, did, we believe, frame a Bill to enable the stock of that Colony to be inscribed, but the measure was rejected by the Assembly, whose financial and economic vagaries, however, render its decisions upon such matters of no real weight. Canada has an inscribed stock, but there are no arrangements for its conversion at the pleasure of the holder into bonds payable to bearer, so that the inscription loses half its valup, ihe defect being probably due to the circumstance that the inscription is effected through the agency of private bankers. What Sir Julius Vogbl sought to do was to get the Bank cf England to perform for the Colony the same duties that it discharges for the Imperial Government and the Metropolitan Board of Works, under which the holders of consols or of the Board's debentures can, at any time, have their inscription cancelled and bonds payable to bearer issued instead, which bonds can be re-inscribed ou application. The principal gain effected by inßctfJbing stook in this

fashion is that it attracts the investment of trust funds; since it relieves trustees from the responsibility of taking care of debentures payable to bearer, which at present is sufficiently onerous to prevent the investment of such funds in Colonial securities, at all events, so far as New Zealand is concerned. Now there are immense sums of trust monies ready for investment at Home, which the holders would only be too glad to convert into securities bearing a high rate of interest, if they could do so with the same safety as accompanies a purchase of consols ; and on one or two occasions discussions have taken place in the House of Representatives as to whether or not the inscription of our stock, or a similar measure, would not lead some of these tunda into the channels of New Zealand stock. A considerable portion of these trust funds require the sanction of the Lord Chancellor for their investment, and the Metropolitan Board of Works has obtained Parliamentary authority to empower trustees to buy its stock. In a draft Bill, prepared for submission to the Imperial Parliament, in order to enable the arrangement made with the Bank of Kngland to be perfected, a clause had been inserted to place New Zealand consolidated stock on the same footing; but Sir Julius Vogel, with wise discretion, while urging the desirability of such a provision, informed the Imperial Government that he would only ask for it if the introduction of the clause would not imperil the safety of the Bill. It is safest to take one step at a time.

The agreement with the bank embraces both the inscription of the present stock and the inscription and management of all future loans. Existing stock will be inscribed at the will and cost of the holders ; but the annual charge to be made by the bank for its other services is £6OO per £1,000,000 up to £10,000,000, and for any further sums £550 per £1,000,000 ; the Colonial Government guaranteeing that these payments shall amount to not less than £2,500 per annum for ten years. In addition, the bank is to receive a commission of £I,OOO per £1,000,000 for loans paid off through its agency. The cost of management will thus be somewhat higher than it is under the existing arrangements. The Premier reckons that since it will be a part of the bank's duty to receive scrip deposits, the quarter per cent commission now paid to the Crown Agents for negotiating loans will be saved. His reasoning on this subject is rather obscure, since he advises that if any fresh loan to a large amount is brought out, or it follows quickly after another loan, it should be negotiated* through a powerful financial house. Now, Messrs Rothschild charged two per cent commission for floating the four million loan, which is certainly not a saving upon the Crown Agents' quarter per cent. The Premier seems to desire to sever the Colony's connection with the Crown Agents, but he will hardly obtain the support of the Assembly in so unwise a proceeding, which would counterbalance any advantages that might be gained from an alliance with the Bank of England. Besides the banking charges, there are the stamp duties to be considered. The Imperial Government has agreed to get an Act passed enabling the duty of 2s 6d per cent, to be compounded by one payment of 7s 6d per cent., which Sir Julius Vogel proposes should be made by the New Zealand Government in the first instance, and added to the price of the stock when issued. This is, however, a point to be carefully weighed, because a charge of threeeighths per cent, is pretty heavy, and would almost certainly fall on the Colony instead of the purchasers, if the bulk of the loan were taken up by brokers; and whatever effect inscription may produce upon trustees, it is to the brokers we must mainly look for some time to come. As, however, an Act is necessary to validate the agreement, the Assembly will have full opportunity of examining the subject in its various aspects; but the eagerness with which the Australian Governments have caught at it shows that the arrangement, as a whole, is a good one.