COLONIAL BORROWING.

Globe, Volume XX, Issue 1395, 5 August 1878, Page 3

COLONIAL BORROWING.

Now South Wales is desirous of availing herself of the present state of the English money m irket by borrowing, but has on the other hand no immediate use for the whole of the money. The "Herald" accordingly suggests:—

there is only one way just at the present time in which we could borrow without incurring loss or doing mischief, and that is by reinvesting in the securities of other colonies. It so happens just now that New South Wales is at the top oi the colonial list. The security we offer stands, in the estimation of the British capitalist, higher than that offered by any other colony, and therefore we can borrow and lend temporarily to our neighbours, not only without less, but even with a slight margin of profit. Practically wo have lent a portion of our surplus to the Government of New Zealand, but we have done it through the Bank of New Soutli Wales, which makes 1 per cent on its agency, and of course we have the Bank's guarantee for the safety of the loan. But if the Colonial Governments have sufficient confidence in each other, why should not they lend each other directly any surplus they may have, but for which they may have no immediate use ? It is always considered right for a Q-overnment to invest in its own securities. What should make it wrong for any Q-overnment to invest in its neighbour's securities? A strong application has lately been made to England to allow trust moneys, which can only be legally invested in Imperial securities, to be invested in Colonial Q-overnment securities. This application has has been press d on the ground that colonial securities are sufficiently safe for the purposes of trusts. But this argument would surely be all tho stronger if the Colonial Grovernments exhibited the same confidence in each other which they ask trustees to exhibit in them all. It would probably etrengthen the position of all our loans in London if. the different Colonial Governments were shown to have the necessary confidence in each other to make their securities temporary investments.