The Gisborne Times. PUBLISHED EVERY MORNING. GISBORNE, FEBRUARY 20, 1903. THE RECENT LOAN.

Gisborne Times, Volume IX, Issue 826, 26 February 1903, Page 2

The Gisborne Times. PUBLISHED EVERY MORNING. GISBORNE, FEBRUARY 20, 1903. THE RECENT LOAN.

The poor result of the recent attempt to borrow in London has given rise to a certain amount of pessimism that is as harmful to the colony as recklessness. But some of the comments are worthy, of every attention. The Auckland Herald takes the Government severely, to task in regard to the recent loan. After alluding to the unfavorable, circumstances, the Northern journal states “ All these things were known to Ministers. They knew, that 1 in consequence of these things, and of the fact that we were continually addin'*; to our indebtedness, the loan could not be as prosperous as the last loan in any circumstances'. Then, if they knew that .the time was unfavorthey should have held off from the market. We suppose, however, that the fact is that they could hold off no longer. They have absorbed all hie money they could get at four percent. 'in the colonies, and (hey must cany on some public works and make provision to meet the debentures as (hey become due. .What could he the oasis for 1 he Premier’s declaration than the credit of the colony never stood higher in the London market than at the present time? The news of yesterday shows that it. never stood lower.” The latter statement cannot, he accepted without challenge, but it is quite true that the market; has proved most unfavorable. The statement that Ministers ‘‘had decided not to accept less than ninety four pounds ten shillings per one hundred pounds, and that tiie loan had been underwritten at. that amount,” seems (says the Herald) to convey the meaning that certain Loudon financiers had underwritten the loan, had guaranteed the colony ninety-four pounds ten shillings, and had undertaken the responsibility of obtaining that amount from the pubtic. We do not think tkat the financial magnates of London are such simpletons as that would infer, 'they knew that the New Zealand Government had borrowed all they could get in the colonies at four per cent.,, and they could thus gauge the. situation. In truth, borrowing in the colonies, which has been carried on, is likely to have 'injured the credit of New Zealand more than the impending 'l'ransvaal loan. To suppose that any London syndicate would guarantee the New Zealand Government ninety-four pounds ten shillings per one hundred pounds in (lie circumstances is absurd. What has happened is probably this, that I he guarantors have taken the loan, charging one per cent, for the transaction. Then the colony receives not. the ninety-four and a half, hut tfiat, amount less the syndicate’s commission and a variety of other charges. This allegation is hacked up hy a rclerenee to the previous loan, which was floated at ninety-four, lmt only ninety-one pounds three and fourpence of that was received hy the colony. Supposing the new loan to be ninety, the colony loses ten pounds in every hundred, while three per cenl has to be paid on the hundred for the whole currency of the loan. And (persists the morning journal, continuing the attack) while the colony is paying this amount to the London capitalist Ministers have taken from the .Savings Bank, the Post Oflice. and ; the large sums at three per cent The Government. t!;re,c per cent, bonds, Which these institutions hold, arc* not worth more than (lie three per cents, which are now being floated in London, that is about ninety. But the Unversmeut got a solid one hundred pounds iiOiu ihcse local institutions for these bonds, which are now so much depreciated. It would have been far better if the Government had taken the funds of these Departments and had used them for the purposes of ,;!\o Advances to Settlers Act. Instead of’ that Ij,e Government entered < the tifld as a rival lender to those ] IVparrincuts, and, having extinguished tlr possibility of their lending mo- < ncy ;o advantage, took their funds <

nr a low rate. Finance does not usually interest the general frublic. hut there is urgent need for dose attention to these matters it we are to hold a high place financially.