The Feilding Star. THURSDAY, JANUARY 8, 1885. The One Million Loan

Feilding Star, Volume VI, Issue 88, 8 January 1885, Page 2

The Feilding Star. THURSDAY, JANUARY 8, 1885. The One Million Loan

There is considerable discussion going on at the present time amongst a section of the Press regarding the prospects of the One Million Loan and New Zealand's position in the London Money Market. Some of our contemporaries, in a lugubrious tone, predict the total failure of the loan, while others even go the length of decrying

Colonial securities. The alienation of the Sinking Fund is also dragged in as a reason why the loan should have little chance of being subscribed. To show how untenable such conclusions are, and the amount of ignorance that exists regarding the favor at Home of Colonial Securities, we would refer our readers to a cablegram in another column. An Auckland loan of £2 5 , 000 was recently placed on the London Market, and the tenders sent in amounted to £117,000 — nearly five times the amount asked for ! This is a most emphatic and satisfactory testimony in favor of Colonial securities, and proves unmistakeably the unbounded confidence the British capitalists have in the future prospects of this Colony. Dealing with the prospects of the One Million Loan, and the alterations made in the financial proposals of the Government, the Post says : — " The reason assigned by Sir Julius Vogel for the decision to postpone floating the new million and a half loan is a very sound and good one. The only wonder is that it did not occur to any one in the Colony when it was first proposed to place the loan on the market. There is no doubt that there was a distinct understanding when the Three Million Loan was authorised, that there should be no more borrowing for the three years which that loan was intended to cover, and the interpretation of the Bank of England that this meant three financial years is a fair and legitimate one. This time will, however, expire with the end of March, and in April the Colony will be free to seek the money market again. Probably the market by that time will be in a' more favorable condition than it is at present. It will be noticed that the minimum of the Million Loan now announced has been fixed at one per cent, below that fixed for last year's loan. In the present condition of the market this is probably a wise precaution, but we shall be surprised if the tenders do not average something below 97^, although it is scarcely probable that the loan will be subscribed for five times over, or be placed above par, as the last million was. At that time the bank rate of discount was 3 per cent., and the market rate was 2\ per cent. At the present moment the bank rate is 5 per cent., and the market rate 4& per cent. Consols, which were then lOlf, are now 99&. All this shows how much dearer money is now than it was in January last year, and if the present loan can be placed at even a slight advance on the miniTmmn, the operation will deserve to be regarded as a highly successful one.