FAILURE OF THE CANTERBURY LOAN.

Grey River Argus, Volume III, Issue 200, 25 April 1867, Page 2

FAILURE OF THE CANTERBURY LOAN .

The correspondent of the Argus, in his 1 review of the money market and the condition ( of colonial securities, gives the following i account of the failure of the Canterbury S agents to negotiate L 300.000 six percent. ] debentures : — . { During the pr-esent plethora of money, 1 there is a perfect scramble on the part of . some of the minor Colonies to get possession j of aport-Jpn of the. large balances lying idle at the banks. The Province of Wellington, on ] the 30fch nit., applied for the modest sum of | " Lso,oooandwashandsomelyofferedLlS2,soo. j • The required amount was taken at LIOB per ■ eight per cent, debenture. This success emboldened the Bank of i v ew Zealand, as agent ' for the Province of Canterbury, to come forward for L 300,000, in 6 per cent. Government debentures. But the attempted negotiation proved a humiliating failure. On examining : the tenders, on the 12th hist., it was discovered that the biddings were merely for L 47.500, pf which only L 930.0 were at and above the minimum of 92 per cent. It was , announced that subscriptions would continue to be received at ohat price up to the 15th ' inst., but the result of the extension of time was very unsatisfactory. Commenting ont his rather puzzling rebuff, the Times remarked: — This apparently abortive result seems to show the impolicy of the course pursued by the small local : Governments of the Colony in press-ing their : loans individually on the London market, instead pf conducing all their financial arrangements, so far as loans in this country are concerned, through and under the sanction of the General Government of New Zealand. That Colony has not authorised . any loan siuce 18G3, whatever amounts remain t-fl be put forth being part of the sum ' then voted by the General Assembly, and the present quotation of it.s debentures is • 103 ; but in the meantime wo have had a Wellington eight per cent, loan, an Otago six per cent, loan, and now a Canterbury six per cent, loan, all offered at prices which, although quite high enough, or perhaps too : high, looking at the purely limited character of the security, are far below those of the , regular Neiv Zealand bonds, and, of course, tend to depreciate the issues of the colony, especially among that portion of the public who are not aware of the existing distinc- : tions. The sooner the system is brought to an end the better, since, if it be encouraged there will be similar applications whenevci money is over-abundant here from every little colonial district or municipality that may feel the temptation of speculative bor- , rowing." The Daily News, in attempting to account for the failure, said :— " In view of the continued demand for Colonial Government i securities in the London market, it would , appear that the temporarily unsatisfactory character of these results is chiefly attribiyt- ' able to the unpopularity of the system, noV ' so generally adapted on such occasions, of s mnking the public bid, as it w^rey-Srß^the dark. Many small capitalists do not under- ■ stand this mode of transacting business, as is indicated by the extravagantly high or undury low prices which are in some instances i sent in." " ' ,