THE LOAN OF FIVE MILLIONS TO NEW ZEALAND.

Globe, Volume XXII, Issue 1860, 9 February 1880, Page 3

THE LOAN OF FIVE MILLIONS TO NEW ZEALAND.

In making the first announcement concerning this loan the "Times" says: "The Bank of England, on behalf of the Crown Agents for the Colonies and the AgentGeneral for New Zealand, has issued the prospectus of a new loan for that colony. It borrowed £3,500,000 last year, and that operation was so successful that it now wishes to borrow £5,000,000 more in debentures at the same rate of interest—viz., 5 per cent. The price of issue will be £97 10s, as oompared with, we think, £IOO for that issued last year. According to a statement accompanying the prospectus, the net debt of the colony after this loan has been iaßued will amount to £26,513,000, the accrued sinking fund now amounting to £1,709,000. Nearly all the money raised on loan has been spent on public works for the benefit of the colony, railways having absorbed £9,850,000, and buildings, telegraphs, harbours, roads, &.!., £5,120,000. In addition to this, £3,770,000 has been spent on immigration. £1,470,000 in buying up Native lands, and £2,000,000 on the Maori war. For the financial year 1878 79 the gross revenue of the colony was £3,552,000, which was about £363,000 less than in the previous year. This reduction is stated to be due to a large decrease in the proceeds of land sales, which is regarded as only temporary. That, bowever, remains to be seen. The population of the colony was 414,412 in March, 1878, and tho imports and exports last year au.ountod to £14,760,000. With these data before them the public must judge for themselves whether the colony is making too much haste to be great or not. Its progress in the past haß baen undeniable, but we doubt whether progress so exclusively made on borrowed money can be a good thing. A good deal of property in the colony is more or less mortgaged, and the Government is busy laying a heavy mortgage on the soil in addition. The very immigrants themselves are mostly a product of debt. We should add that th"se debentures may be converted at the Bank of England into Four per Cent. Now Zealand Consolidated Stock, the rate of conversion being £l2O of consolidated stock for every £IOO of debenture."

The following observations appear in the ,! Pall Mall Gazette :"—" Once more the colony of New Zealand has come forward to barrow another sum of five millions sterling in this market, and the Bank of England, by acting as the introducer of the loan, gives it a character in the oyes of the general public which it would not otherwise possess. Wo have frequently expressed our opinion about New Zi'uland. It ia the colony of all others, perhaps, bc.it suited to emigrants from this country, and the strides which it has made in prosperity during the last few years could not be exceeded by any American State. Climate, soil, position, coast line—all seem to point to New Zealand as the Britain of the South Pueifie. But all this notwithstanding, there can be little doubt that the colouy is at present borrowing in excess of what is prudent or even safe. To begin with, the revenue of the colony is made up in great part of sales of Crown lands. Theße sales are dealt with entirely as income, and of late there haa been a heavy falling off. The failure of the City of Glasgow Bank had an effect which haa not yet be<;n fully realised ; there is a reaction against previous inflated prices; and it ia distinctly admitted that work for the people is pcanty and that assisted immigration will have to be stopped for a time. This loan therefore would seem to be not so much the outcome of a natural demand for further development as a means of providing work for the navvies and others who would be thrown out of employment by a cessation of Government enterprises. That another loan was inevitable unless the New Zealand Government could be content to enter upon a less ambitious system has long been apparent, but this, does not make the security any better,"

In another number the " Pull Mall Gazette" aays :—"New Zealand finances in many respects do not compare favorably with those of Victoria. In the former case the revenue is £4,168,000; in the latter £4,504,000. New Zealand raises from taxes £3 12a 5d per head ; Victoria £1 19s IOJd. The public debt is £52 5s 5d per head in New Zealand, and £l9 7s l£d in Victoria. On the other hand, New Zealand has, or rather had at the close of 1878, 1089 miles of railway, and 8035 miles of telegraph wire open for trafllo, while Victoria has but 1052 miles of railway and 5403 J miles of telegraph wire open. [We take these figures from a return printed In the "Statist of November 22nd.] New Zealand, in short, is much more highly developed than Victoria, and haß had to pay for its development. A steady increase of immigration is highly necessary to its continued prosperity. Anything like a loss of population would plunge the colony into severe financial difficulties. We regret, thetefore, to see the new issue ' for carrying on Public Workß and Immigration'—for the former are already sufficient, and the latter ought not to require artificial stimulation at the cost of continual new loans."

A correspondent who, the " Pall Mall Gazette" Bays is entitled to be heard on Colonial subjects, writes that journal as follows : —" In this country we have one mile of railway for every 2,000 of the population ; in America, which is supposed to be the most ' over-railwayed' country on the face of the earth, they have one mile for every 560 of the population ; but in New Zaaland they already have one mile for every 345 of their population, and yet they wish to spend (according to the Ministerial statement) other £9,000,000 in that direction. Tho truth is, as you observe [we need not perhaps correct our correspondent's somewhat strained interpretation of what we did observe], they only wish to keep their workmen employed and keep up the presently inflated prices of land until the present holders can get it sold to our simple and ill-informed farmers; then the land speculators will clear out of country and leave the purchasers to pay the taxes—whioh they can never do. The other day I took up the advertising sheet of the " Scotsman " newspaper and found no fewer than Beven different companies advertising for money to lend in New Zealand. Yet they want more money."