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Hokitika Guardian, 12 June 1931, Page 4

Thk fact that the New Zealand loan on the London money market had been underwritten gave promise of its success—but the result was not as satisfactory as expected. The Prime Minister Olr Forbes) decided on a short term loan of three years, which was expeetd to ensure ttie propesal being well received. The London financial papers supported the loan prospectus generally, and several compliments have been passed to New Zealand. As one paper remarked: “The credit and reputation of New Zealand are always deservedly high.” Backing such ae that might have assisted the underwriters more. The rate of interest will approximate six and a half per cent, which is substantial, but it is no doubt the best that could he arranged, especially as earlier it was not possible to borrow at all, even at a hierher rate. However, the financial advisers at Home saw the way clear for the entry on the market, and it is not often the expert advice is at fault. Permission to borrow indicate*-, that the economic lines on which the national finance was. shaping, was approved in quarters best able ,to judge as to sound finance. The economies and reductions made bv the Government in this country to assist the national finance, were necessary to check the excess of expenditure above income, and the prompt handling of the position, difficult and unpopular though it rrrv be. has been all to the advantage of the outside credit of New

Zealand. There lias been, an excess of borrowing in the past, no doubt, duo mainly to the general How of prosperity, but when world conditions clia god. the general situation was altered. and borrowing had to taper o(F. The fact that a. loan is now possible should be helpful to the general state of affairs. Credit will increase as a, result of the loan, and the money in turn will help to provide more work and employment. A letting-up on me present stringent conditions will lie for the benefit of the country as a whole, and give more life and vigour to development. Something of a spurt in general business will lead to ,« greater show of enterprise locally. Where funds arc being conserved m a precautionary way there will row he the opportunity to keep step with the public movement, due to the extra money available. In this way there will be an all round benefit, and the Government has achieved something of a stroke of good fortune, by its judicious approach to the money market. The time is certainly opportune, and with the flotation there must be a turn in the tide of business generally, and the depression will be less acute. Confidence will grow with the improvement indicated, and there should be the certainty of better times close at hand.