AMERICAN AND NEW ZEALAND CREDIT.

Globe, Volume XXIII, Issue 2163, 31 January 1881, Page 4

AMERICAN AND NEW ZEALAND CREDIT.

The San Franoisoo correspondent of the 41 Otago Daily Times " writes :—" The national debt is being paid off at the rate of £3,000,000 a month ; therefore, in about eight months we get rid of an amount of liability equivalent to the public debt of New Zealand, under whioh you ore said to be, and I believe are literally," groaning." And what is still more strange, at the olose of the Civil War tho credit oE tho United States was not as good as that of New Zealand is to-day. After years of utter prostration brought about by a policy of contraction, in the interests of the bankers of Europe and America, this great country has recovered its elustioity, having shaken from its financial throat the felon olutoh of the Bank ring ; and tho London " Times " and the " Economist " both declare that " American credit is nearly as good as that of England, .•and that her finance is the admiration of the world." iTo my thinking, the United States ia financially to-day the strongest country in the world. We are now discussing a refunding Bill in Congress, for the conversion of €00,000,000:1 ols. (£120,000,000) of 5 and 6 per cent, bonds into 3 per cents.; and English and Frenoh financial authorities ooncede that me can refund tho entire loan at 3 per cent. But the Bank ring has a rival scheme, to inure to its own advantage, namely, to issue ■the whole amount in Treasury bonds ("bills," you call them), redeemable yearly at the rate oZ 40,0C0,000d01. Now this nice little device would throw these short-dated securities into Wall street, New ' York, and Lombard «treet, London, because no one else could •handle them except banking syndicates. The rate of interest would be at least 4£- per ocjnt., and with charges added, 5 per cent. A.great deal of money will be expended in the. promotion of this scheme, and as the great New. York dailies now belong to the bank and railroad magnates, "public opinion," as expressed in their columns, goes dead against the. 1 3 per cent, refunding bill promoted by the Ways and Means Committee. Bat tho United States is not owned just yet by Jay-Gould, the Rothschilds, Baring and others, and tha 3 per cent, refunding bill will pass. The magnitude of this contemplated funding operation is immense, and when completed the saving on interest will create a.redemption fund .equal to 2£ per cent, per annum, plus expenses. If your Colonial Treasurer could save 2£ per oent. on £200,000,030 a year by a single financial operation in the money market, it would roliovo him from his difficulties, and entitle him to rank with the foremost financiers. With üb'it will not create a ripple upon the surface. Tho Secretary of the Treasury will simply apply the fund to the purchase of long-dated .bonds, and with the already overflowing treasury receipts it will accelerate the great work.of financial redemption. My own impression .is that six hundred millions may be .placed at -a fraotion under 3 per cent., because ; United States, 4 per cento., not two yes>rs old, sell at 9 per cent, premium, and when tshat refunding loan was projected the bankers scouted • the idea that the United Statse .could borrow money at 4 per cent. But we bad just then remonetised silver and resumed.specie..payments, and the oredit of the country shot above the heads of banking Shyloaks and crimpiag usurers. Now I. am not HQiac to lecture New Zealand financial*, albeit' I think they fail to peroeive at ones Alio strength ,ond weakness of thoir position.. 7'doß't thiol, yen are in any danger of "repcrii-ifcsCß," at I ceo one of the Canterbury members imagines. Moreover, I don't think thtt you are much to be pitied, and-my advice is to give over "groaning," and knuckle down to kard work, and . praotice economy—not " pub K-j economy" merely, whioh is stopping someone. else's cheese and ale, but private economy as well. -Yo-j want eoonoisy of time as well as eoonoxiy of resources.. When I first-came &o America, and observed the methods of the ..people, I thought I could formulate the«secrot of their marvellous industrial success thus—'' The t United States—a: country which baa grown rich by working extra hours." Now if you would give upyourabsurd eight-hoars crut.o, and hit out iike men late and early, do yoa think you would not soon create such wealth .as would drag you out of the depression of * hard times ?" .Go where you will, there is " hard tunes." Hard tim !s is the normal condition at whole tribes o£ men. If they chanced to strike a seotion where manna fell, Ghey would still be in a chrome state of " haed-upneas," because they . would not take the trouble to gather the ' ,isnanna late and early. It was the hard times . Oi the past few years that developed the agricultural, mining,and manufacturing industries of California, which, despite the prevailing dullness, is richer than ever it was before. Economise time, eeonomife labor, eoonomise products, and economise money, and the task of the Colonial Treasurer will be lightened immensely. Your public credit will -be' improved ; you will be able to borrow upon better terms.