The Guardian And livening Star, with which is incorporated the West Coast Times. WEDNESDAY, OCT. l5th, 1921. BRITISH OVERSEA LOANS.

Hokitika Guardian, 15 October 1924, Page 2

The Guardian And livening Star, with which is incorporated the West Coast Times. WEDNESDAY, OCT. lsth, 1921. BRITISH OVERSEA LOANS.

An address was lately delivered at liome by .Professor .). M. Keynes 011 oversea investments, with particular 10le re lire to tile .Heels prod need by the Colonial Stock Act. lty this measure, says a l.oiidon iinaneial journal, liio .securities of Colonial governments and of India became trustee investments. It is apparently the opinion of Professor Keynes that this legislation has had the olivet of inducing the Colonies to borrow too freely, or at least on unduly cheap terms, whilst it lias also tended to create a la Iso impression among investors of the real value of Colonial stocks. Professor Keynes stated that loans to the Colonial and Indian Governments now amount to about 2900.00(1.(109, and they are being added to at the rate of about £00.000,000 a year, with the Jesuit that tlm annual borrowings exceed in amount the interest payable oil the existing debt, which is not a very satisfactory slate of

affairs. The speaker added that under the Colonial Stock Art money can bo 5 borrowed more cheaply for harbour works in New South Wales, for in- . stance, than for similar enterprises in this country. Professor Keynes pio--1 Pluses to remedy this state of affairs in a. somewhat remarkable way. namely, by a repeal of the existing Trustee Acts, and by enacting that no new issue not carrying a British guarantee should lie added to the list of trustee securities, except by special licence of the Treasury. Tt. is to be feared that such a proposal, if carried out, would do more harm than good. It would certainly be resented by the borrowers directly concerned, for they would have to pay considerably more air fi'Osli money if their issues were ruled out of fhe trustee list. Presumably the measure would not lie made retrospective— to include, that is. existing Colonial and Indian Government stocks for in that event there would be automatically a severe decline in values; many holders would hasten to soil, and the market would he demoralised. Such a drastic remedy scarcely seems neces-

sary, although it may be granted that in tile past the Colonies have borrowed too freely, and they have got their money too cheaply. Apart from these considerations, there does not

appear to be anything very alarming in the present situation. Apparently the idea behind the proposal of Professor Keynes is that Britain should in the future lend less to the Colonies and more at home in the development of our own industries, ft would probably lie unwise, however, to interfere by means of fresh legislation with a system that;-has worked very well hitherto. The extent to which the United Kingdom has lent abroad in the past, not only to the Colonies hut also to foreign countries, lias been a groat source of strength to Britain, It is true that .investors in the last forty years or si have lost a great deal in foreign investments. but such investments have added to the wealth of this country by enabling us to disjxi.se of our surplus production, England receiving in return what really amounts to a claim on future production of foodstuffs and

raw materials, n.ll adequate supply of which is essential to a country like Groat Britain.