The Guardian AND EVENING STAR. With which is incorporated “The West Coast Times.” WEDNESDAY, JULY 6th, 1921. NEW ZEALAND'S CREDIT.

Hokitika Guardian, 6 July 1921, Page 2

The Guardian AND EVENING STAR. With which is incorporated “The West Coast Times.” WEDNESDAY, JULY 6th, 1921. NEW ZEALAND'S CREDIT.

lUic pnrticitars in regard to the flotation of the New Zealand live million loan in London, meagre as they are at tli 0 time of writing, indicate, however, that the credit of the country at Home is fairly good. Folk have not come to realise yet exactly haw tight the money market is. It is so brief a time since money appeared to he plentiful, and everything was moving with sweet financial celerity, that the sudden stringency is not regarded in its proper perspective. As far ,'ts can he ascertained the tightness of the money market is likely to prevail for some time, ail'd money will yet be scarcer and dearer to the borrower. Recently South Australia and Tasmania went on the London market for a five million loan at par, interest being 61%. New Zen land for a similar loan at 6% issued tit £96 per cent, came off Tetter in tho actual applications. The underwriters of the Australian loan had to take up 72 per cent, of the amount, while the New Zealand underwriters tire left with about 50 per cent. The Dominion loan was thus in greater favour with the public. Actually, allowing for discount on the loan price, the cost to New Zcnand will work out at about 61 per cent, interest, which is the dearest loan money the Dominion has yet taken tip. The highest rate of interest paid hitherto was 5 per cent, and the lowest 3 per cent. As the transaction goes, New Zealand has got some cheap money in these days, hut it must be stated that it is not to the credit of tho administration it had to go on the London market so soon. More could hav c been done in the local market in the past, and it must not be

forgotten that the Government broke faith with ihe people in regard to the enforcing of th e compulsory clauses in loference to the last war loan raised ill New Zealand. ’1 hose who were patriotic and scraped to keep faith with the Governments alleged urgent requirements paid up their quota, hut those who understood the political mind better, stood ofh, and the country wont short of money it should have had. That position was not creditable to the present Government in any way. It , was a breach of faith of a most glaring , character. There was also the fact that though the Government was preaching economy to the pimple, it was not practiced in the administration of the country’s affairs. Even to this day, there is a serious dallying over the urgent business of simpl 0 retrenchment to reduce the enormous public expenditure of this country, which in many large departments which should be selfsupporting out of their own revenues, are trenching on the income of the country, derived from taxation. This is not sound administration and in due course the Government will he called to account for it. If lias not been disclosed how the new loan money, is to he used. The bulk of it no doubt will 1 required to carry on the public works of the country.z Heavy payments for plant and material have to he made at Home for English contracts, while here Hi ere are many highly important work's

hung tip. In the recent past a good deal of money was borrowed from tlie consolidated fund to keep the public wOrks going. This will require to be paid. Altogether, the loan money will he little enough for urgent requirements, and the stringency will prevail iu regard to general public works for some time. Finance is going to he a very ticklish subject for the Government to deal with, and it Mr Massey is going to keep, his promise ol reducing taxation, the task will become more difficult still.