Hawke's Bay Times. MONDAY, OCTOBER, 28, 1867. THE CONSOLIDATION OF THE PROVINCIAL LOANS.

Hawke's Bay Times, Volume XII, Issue 521, 28 October 1867, Page 2

Hawke's Bay Times.

MONDAY, OCTOBER, 28, 1867. THE CONSOLIDATION OF THE PROVINCIAL LOANS.

" NuHius addict us jurare in verba magistri.

Amongst al! the important business transacted during the recent session session of the General Assembly nothing of greater importance to the Colony as a whole, or the Province* more directly interested, was done than the passing of the bill known as the “ Consolidated Provincial Loans Bill.” It was most correctly described by Mr Fitzgerald on the occasion of his proposing the second reading as “ a measure of the largest financial character yet brought under the consideration of the Legislature.” and the questions involved in it, being as it were outside the General Assembly, rendered the subject one of vast diffi culty as well as importance.

These difficulties were occasioned in a great measure by the varying circumstances of the different Provinces affi-cted—the several loans being of very different market values and bad been taken up at very dif ferent rates by holders of the scrip ; consequently the interests of private! individuals in the matter of gain or loss were involved in the action to be taken by the Government, But not only were the interests of the holders of scrip so involved, but those of the several Provinces also in at least •ts great a degree. The action of the Government amounted in effect to the guaranteeing of all Provincial loans by their conversion into Colonial stock, whether these leans had or had not already been taken up ; and this guarantee added a very great value to these loans, which in the case of those already taken up amounted to i bonus to the holders of tin* serip. and in the other case to the Provincial Governments, whose loans were for the time held in abeyance.

The details of the measure weie discussed in a Select Commit lee of the House, and had the advantage of the best attention of some of the greatest financiers of the Colony, and we do them but justice in supposing that the best possible result under the circumstances was obtained. Yet we cannot allow the views of such a person as Dr Featlierston, who was opposed to the Bill, on such a matter to pass int-< oblivion, without first giving them some of that consideration their importance demands. Dr Featlierston lias said in plain terms, that the Colony is by this hill, and its kindred measure, “ The Loan Allocation Act, v being swindled, in that it is mad« liable for the debts of ilie Provinces, without extracting any equivalent from the bondholders for the boon. Some of these bonds, he tolls us, were, previous to the action of the Government, worth no more than the parchment on which they were ininscribed, and there is none to say a word to the contrary. He shows that the Colony was not bound to give its security to the Provincial Bonds, and that as without it they were of small value, it could demand what it phased for the boon it bestowed. That, in fact, the bondholders were entirely in the hands of the Government, and would have been forced to accept just what terms it might please to impose. Of course the ground taken by the Government was the moral one—or, rather, we should say, that of expediency. Bondholder* mbrbt rondilv r j ~ j say that the Colonial Government, by

allowing the passing of Provincial 1 an bills, hail made itself a party to them, and although they could have nau no legal chum beyoim the Governmeut of the Province for which each loan was raised, that they still had a moral one in that the Colonial Government had recognised the loans if it had not admitted its liability for them. But, allowing all this, the fact remains that the scrip for these loans was only of certain market value, and Dr Featherston shews that by the Colony purchasing them instead ol guaranteeing them, from £ 100,000 to £400,000 might have beeu saved for the Colonial chest; they might, in (act, have been purchased at a dis count of from six to twenty-five per cent, instead of being -by tbe action of the Government raised at- once, to a premium, and that tbe voluntary raising of the at best questionable moral claim to the status of a legal one was in fact neither more nor less than the conferring of a bonus upon the bond ladders equal to the abovenaraed sum of Irom £IOO,OOO to £400,000.

For our own part we think as we have said, that the moral claim did not weigh with members so much as the question of expediency. They saw that the Colony lias not yet done with borrowing—some of the very loans contemplated by these bills are not yet raised, or are but partially raised—these will acquire additional value, and the action of the Government in beaiing the responsibility for outstanding debts will be of benefit to its credit in the event of its again coming before the world as a borrower, and as it was, actually at that very time, in such a position it was felt that the £150.000 or £400,000 would he ill-saved if it prevented the proposed loan from taking its legitimate place in the money market.

But be the considerations which induced the Government to assume tin responsibility for Provincial debit what they may, the fact remains that the burdens fall upon the people, am it becomes a seruus qatslion wlielhtt by these acts they have not advanced ■me step towards placing the Colony in the position of the bankrupt Pro vinces. Our Colonial debt is unquestionably more—fur more—oppressive I upon us individually titan the national debt of Great Britain upon our fel-low-countrymen at home. Our taxation is heavier; and when we see Province after Province come to the verge of I tank riipicy, we cannot forget that the Provinces compose the Colony, ami even supposing the utmost possible economy were to be at once adopted in the administration of the Government, the sums which must be raised from the people annually' for the mere purpose of paying interest of debts tonus of itself an amount of taxation beyond cur ability to bear without sacrifices little contemplated when we became colonists.