THE 5 MILLION LOAN

Hokitika Guardian, 26 April 1922, Page 4

THE 5 MILLION LOAN

WELLINGTON, April 21

Interviewed by a “l’osl” reporter to-day regarding the cabled announcement of the lorin ? the I'l ime Ministei srdd : “Naturally lam gratified til the result so far as it has gone. The fact that the New Zealand five per cent loan ol five millions has been underwritten at par is a splendid testimony to the high financial standing of this Dominion and I think I am entitled to add, an appreciation of the steps taken by the New Zealand Government to cope with the post-war financial stringency through which the whole world is passing. The result of the arrangement agreed to is a considerable gain both as regards the amount of the actual cash receipts and in the reduced annual charges. “For instance, ilirce weeks ago the last Commonwealth loan, also for five millions, was announced at five per cent a t £96, which means that our loan for the same amount at the same rate of interest will return us £200,000 more in cash than will the Commonwealth loan to the people of Australia. The Commonwealth 0 per cent loan in January was issued at £97. ft is reasonable to assume according to a comparison with that loan, that the actual gain in cash will be £150,000 while the annual charge has been reduced bv £50,000, which, if multiplied by the number of years of currency represents a very large saving.”

I lie new loan is made repayable in 193;;—15, roughly a currency of thirteen years, if redemption is made at the earlier date The authority for the loan is the Aid to Public "Works and Land Settlement Act of last session. No definite allocation of the money can yet he given, but roughly the money will be devoted mainly to public works—roads bridges, railways and electric power works—land settlement and general development purposes. ‘‘f am not keen on borrowing, even at .; per cent,” added Mr Massey, “for tlca simple reason that it is almost impossible for the Government to use the money for a purpose which will return anything like that rate of interest. In siicu cases there is only one way to make up the deficiency, that is by increasing taxation, to which most people strongly object. Under existing circumstances, however, flic loan is justified, but it will be the business and duty of the Government to see that tile money is used to the best advantage, so that in years to come there may he something left to show for it. ] know there are many people who will not agree with me, but I believe that the next year or two will sec money much cheaper than it is at present,”

N E. LOAN FLOATED LONDON; April 21. 'I no New Zealand £5.00!),000 loan has h‘‘cn subscribed. The lists are being closed to-morrow.