Manawatu Herald. FRIDAY, OCTOBER 1, 1880. NEW ZEALAND SECURITIES IN ENGLAND.

Manawatu Herald, Volume III, Issue 9, 1 October 1880, Page 2

Manawatu Herald. FRIDAY, OCTOBER 1, 1880. NEW ZEALAND SECURITIES IN ENGLAND.

There are numerous and sbroog indications that the capitalists of England are beginning to look askance at New Zealand, on account of her excessive borrowing and heavy indebtedness. A few days ago we quoted from the Pall Mall Gazette a forcible article, in which this Colony w«s dealt with in terms of anything but a friendly uature. The article also suggested to the mind of the thoughtful reader the idea that the views expressed were likely to be pretty generally shared at home. The articles of leading English journals are not only guides to public opinion, bub also the means of its expression, aDd we rather fear that in this case the Pall Mall Gazette has expressed the opinions it found ready mado and rooted in the public mind. There is now being discussed in several of the colonial papers an article from Truth, a London journal which circulates largely amongst the upper middle class,in which the writer makes a ferocious attack upon the reckless character of New Zealand finance during the last ten years, and openly states his conviction that " bo soon as the public in England become alive to the real condition of New Zealand's finances, they will decline to lend her more money, and that not long after this easy mode of balancing revenue with expenditure is cut off, she will hare to suspend payments." From the tone of the article, we incline to chink that as to the "suspension of payments " the wish was father to the thought. Still, accepting t.ho article as an indication of the views of capitalists at home, it is just us well that the Colony thould face its true position as legards its relations with the London money market. That position may be thus sums mariaed. Our credit is declining owing to our financial position and heavy indebtedness, and it will be almost useless for us to go to the English money market for a further loan for several years to come. It will be remembeied that our last five million loan was issued through the Bank of England, which, ad the writer in Truth says, acted as " sponsor " for it, Even then, the conversion by the loan agents of the 5 per cent, five million loan into a 4 per cent, six; million loan was so favourable an arrangement to the bond* holder, that under the sponsorship of the Bank of England the loan was certain to go off well, apart from the opinions held of the great indebted* ness of the colony. If, however, New Zealand had then gone on her own

merits to the English money market instead of through the Bank of England, it is extremely doubtful if the full amount of the loan would have been subscribed. But, besides the newspaper articles to which we have referred, there is unfortunately other evidence to hand, showing that New Zealand stocks have still a downward tendency. From recent home circulars of the New Zealand Loan and Mercantile Agency Company, we quote the subjoined sentences regard* ing New Zealand stocks. In the circular dated 30th July, we find the following : — " Colonial Securities have been fairly supported, but some New Zealand and Queensland Stocks have exhibited weakness. New Zealand 5 per cents. 1914 and the 5 per cents. Consolidated have fallen £ and 1 respectively ; the 5 per cents. 5-30 are down 1, and the 5 per cents. 10-40 are also 1 lower; while the new loan is 2 worse, and the Inscribed Stock 1." Then, again, in the circular for the 'Frisco mail of 12th August, we find this : — " New Zealand 6 per cents and the 5 per cents. 1914 are the same as on 15th ultimo, but the remaining issues of that Colony mark a decline of from £ to 1 on the month." The above announcements become even more important when compared with those relating to the loans of other colonies in the Australasian group,tbere being an advance in most of their stocks. Considering, therefore, the warnings of the home papers as to the large indebtedness of New Zealand, and the fast that our stocks have a decidedly downward tendency, a3 being doubtful, we can as a country rest assured that we shall get no more rCnglish money for a considerable number of years to come, and that in the future we shall have to stand upon our feet without the aid of the crutches supplied by the English money market. There is a large amount of truth in what Sir Hercules Robinson said the other day, that New Zealand has *' discounted the future too much." Here we are, a country that has had a constitution only about 26 years (the first New Zealand Parliament met in 2854), and yet in that time we have piled up a national debt of about £29,000,000, and annual^ send interest out of the country amounting to £1,500,000, without considering private indebtedness or the loans of the borough councils, harbour boards, and other local governing bodies. The va3t sum mentioned is spread over only some 450,000 people. When these facts are considered, we can scarcely wonder at the English newspapers and capitalists regard* ing our position as doubtful ; and only by submitting to heavy taxation and the most rigid economy will the colony be able to pull through its difficulties. However; the success of the country depends upon the prosperity of the individual settlers, and if those who are at the head of affairs will take measures to promote local industries, to settle people judiciously on the waste lands of the Crown, and to make the railways return as large a profit as possible, there need be no fear but that the withdrawal of the English capitalist's crutch will be the means of teaching the colony to walk alone. If in tho process of learning to walk by herself New Zealand should experience a few tumbles, her inherent vitality will soon place her on her feet again, and sooner or later show her to be what she undoubtedly is, one of Hritannia's strongest and most promising daughters.