A Good Idea

Feilding Star, Volume IX, Issue 88, 12 January 1888, Page 2

A Good Idea

The following was sent to the Wellington Post from a correspondent in Dunedin : — It , will be interesting to know that if the Government like, they can, without any difficulty, raise a million loan in the colony at 6 per cent. Mr Valentine, M.H.R., has just beea in communication with the leading financiers in Dunedin, and they are agreed that the whole Bullion would be taken up in the colony, as there is abundance of money. A short j loan for, say, three years could be got at par at 5 yer cent., and the saving would thus be great, as it is not expected that the English loan would realise more than 95 or 96, from which, of course, would be deducted commission, &c. It is thought that by the end of the three years another loan could be floated in the colony, and even if not, it would, give the Loudon market a rest, and meanwhile the moral effect would be immeasurable. There is no doubt the project is quite fusible as the amount of fixed deposits bearing interest lying in the hands of the banks doing business in the colony on September 30, 1887, was £7,480,---372 11b 6d. The confidence the people have in the security offered by the Government has already been shown by the popularity (as evinced in tbe large amount of business done) of the Post Office Savings Rank and Government Insurance Departments. The figures wo have quoted prove also the correctness of che statement made by the " Dunedin financiers" as to the abundance of money in the colony. But there is another aspect to be looked at. Supposing one million of money were taken from the fixed deposits in the banks it would have the effect of compelling the the directors not only to restrict their business by that amount, but to increase the rates of interest and discount in proportion. The withdrawal of so large a sum from what is a powerful factor in the capabilities of banking institutions to assist commerce would have a disastrous result and probably exercise a deterrent influence over the •yave of prosperity which now promises to visit the colony. The scheme savours a little of Sir Julius Yogel, whose influence over Mr Valentine is well-known in political circles.