The Feilding Star, Oroua & Kiwitea Counties Gazette. Published Daily. Published Daily. TUESDAY, DECEMBER 8, 1896. THE LOAN.

Feilding Star, Volume XVIII, Issue 136, 8 December 1896, Page 2

The Feilding Star, Oroua & Kiwitea Counties Gazette. Published Daily. Published Daily. TUESDAY, DECEMBER 8, 1896.

THE LOAN.

THE fact of the New Zealand halfmillion loan having been successfully floated in the colony at slightly above par _aay be considered as a veritable triumpb. In another column particulars are gweo which show that ten applications vera received which reached in the aggregate the sum of £508,000. Principal aad i«<*_r«sfc are both payable in the oolony, so tJUat* tbey will not bo a drain on our re- j sources as in the case of loans floated in the London market. It must be remembered Also that tbe expenses connected witb toe loan will be re markably small when compared with those incurred in underwriting i„ England. It i« impossible to cor.jJAv? ture what will be the immediate effect oa the minds of financiers both in the cokoy and abroad, but it w oat: too mud. to expect tbat altogether it wiii I be beneteial, and go far to restore < that confidence f& New Zealand the ( absence of which #.*« bad such »do ' pressing «ffect o» .epmof-effe^ and in- , dustry. The first thing wlrte.. um y - fcappea-wiil be &c J&gPtMHi l_

channels of much of the money which has been for so long lying in the banks comparatively speaking idle. Although ] the rates of interest uiust become more concrete, yet borrowers will become masters of the situation, and be able to obtain advances on securities with a somewhat contracted margin. That is to say, what were considered, and justly so, second or third rate risks will advance to the positions of second and first rate risks. It is not at all probable the Banks will, increase their rates on deposits because— we now quote from the last report of the Bank of Australia—" The fact is the Banks can no longer employ their funds legitimately at the old rates of interest, and indeed find it exceedingly difficult to employ them at greatly reduced rates. The consequence has been that conapetitioß for deposits has almost entirely ceased, and has been followed by an equally keen competition for good and sound advances. The borrower is for the moment master of the situation. If he has good security to offer— and at the present time (October Ist, 1896) he cannot borrow at all unless he has — the Banks are keen to underbid each other, with the result that the borrower is able to make terms for himself more favorable than has ever before been heard of in Australia." In conclusion we agree that what is wanted now is a large, general, and sustnined rise in the value of our staple products, and an utter abstention by our rulers and governors from any more faddish or trade restricting legislation.