Mr. Nash’s Negotiations

Gisborne Herald, Volume LXVI, Issue 20003, 31 July 1939, Page 16

Mr. Nash’s Negotiations

Sir, —Two facts are now apparent from the reports to hand as to the progress of the negotiations for a renewal of the maturing loan of £17,000,000: (1) The underwriters will have nothing to do with it; (2) That New Zealand has, lor the first time in her history, reached the humiliating position of having to make a composition with her creditors, and offer inducements to the lender by way of heavy repayment terms to obtain temporary accommodation for a period of five years. To anyone following the results of recent loans floated in England, the refusal of the underwriters to underwrite the loan is not surprising. The following figures show the result of three loans recently placed on the London market: South Africa, £5,000,000, at 3£ per cent, oversubscribed by £58,000,000; Northern Ireland, £2,500,000, 33 per cent, subscribed in one hour; Australia, £6,000,000, 4 per cent, 80 per cent left on underwriters’ hands. New Zealand loans are obviously unpopular at Home and it would appear that the underwriters fear that they would suffer the same fate as occurred to them with the Australian loan, and we cannot therefore blame them for refusing to underwrite a loan that would most probably prove a dismal failure. As to the second fact above quoted, I should imagine that it is a record, for New Zealand at least, to have to submit proposols to its bondholders which are tantamount to making a composition with our creditors. In effect, Mr. Nash says: “I know we are in a bad way; I know that confidence in us and our credit is at a lbw ebb; but if you’ll only give me the money

for a wee term of five years I will pay the whole debt off in that period.” And these are the men who talked so glibly of “insulation,” “costless credit,” ’isms of all descriptions, and gulled the public into thinking that the millenium had arrived. If this is Mr. Nash’s idea of “bouncing the ball,” I do not think lie will make the trip. A fourth standard schoolboy knows that unless you make a country reasonably safe for capital you cannot have a prosperous land. When will our leaders assimilate this elementary fact? ALL BLACK.