THE FOUR MILLION LOAN.

New Zealand Times, Volume XXX, Issue 4411, 10 May 1875, Page 2

THE FOUR MILLION LOAN.

We have reprinted, from the leading London newspapers, the history of the New Zealand four million 4| per cent, loan, negotiated by Mr. Vogel through the house of Rothschild and Sons. The extracts in question will enable the New Zealand public to appreciate the real stale of the case, which has been misrepresented by various newspapers in the colony, either through ignorance or by design. Possibly we should be correct in attributing a good deal of both to the writers who have already handled this subject. With a single exception, however—that of the Daily News —the loan was fairly treated by the London Press. Nothing, for instance, could be fairer or more generous than the comments of the Financier. The Times made no remarks, contenting itself with stating the facts, and noting the effect of the issue upon New Zealand securities ; while the Standard lent the weight of its financial authority to “the solid character of the security “ offered.”

This is eminently satisfactory, inasmuch as the credit of New Zealand had been seriously affected by the writings and speeches, not of Mr. Fbllowes alone, but of factious and ill-conditioned persons in New Zealand, who wreak their personal animosities to individuals at great cost to the colony. Through the reiteration of the injurious statements referred to, the negotiation of the loan, when Mr. Yogel arrived in England, was a matter of the utmost difficulty. We are not at liberty to go into details, but we do not hesitate to affirm that but for the bold and prompt action of Mr. Yogel, the colony would have been completely at the mercy of the syndicate of brokers and others, who look upon colonial loans as their legitimate source of profit. Money might have been got, but it would have been at an enormous sacrifice. But Mr. Vogel, to whom the interests of the colony in this matter had been entrusted, was not to be baffled, and he resolved on the bold and vigorous action of placing the business in the hands of one of the most extensive financiers in the world. In concert with Dr. Featheeston, he placed himself in communication with Messrs. Rothschild. That firm expressed their willingness to float the loan. The interview took place on Friday evening ; the loan was announced on Monday, and it was closed at noon the day following, far more than the amount having been subscribed.

This success, as might be imagined, was not agreeable to the baffled operators, who counted on making what money they pleased out of the loan, and it was rumored that it had not been taken up. Every obstacle was thrown in the way to prevent its being quoted at a premium; but in vain. Now Zealand had escaped from the clutches of those who prey upon colonial securities ; and the dread then became general that other colonies might follow its example, and thereby escape the recent fate of Victoria and South Australia, whose small loans wore partial failures. Echoes of the wail of disappointment have reached New Zealand, and of all places in the world to find them taken up with sounding note, that place is the Southern Ct'oss newspaper. It has lent itself, ignorantly let us hope, to those whose interest it is to decry this financial transaction by Mr. Yogel, with the hope of avenging themselves in the colony for the effectual check they received out of it, on their own chosen battle-field—Lombard-street. The loan has been declared a most successful financial operation by English financiers of repute; and when the facts are generally known and understood in New Zealand, the same opinion will bo hold by all competent judges. As wo have already said, an attempt was m de to depreciate the security by giving gut that the loan had not been fully subscribed; —that it was a failure, in point of fact. Messrs. Rothschild, however, promptly met this by the assurance that the whole four millions was more than fully applied for; that they had allotted to 1700 hona fide holders ; that one Scotch bank had taken over £200,000 to hold as an investment; and that never, in their experience, had they placed a loan so well which met with so much opposition. These are facts and not fiction. They are of the utmost consequence to the colony; and they ought to encourage the neighboring colonies of Australia to follow the example this country has sot on the

present occasion. This colony will receive £9l ss. to £9l 10s. for’every £IOO debenture. This may appear a low price as compared with the present market price of New Zealand debentures of former issues; but it must be borne in mind that the latter mentioned debentures have a cumulative interest due on them, while on the new issues the interest will not fall due till August next. Again, any commercial man will readily understand that a largo influx of a commodity, on a market already fairly stocked, if required to be immediately realised, will have to be placed at a lower figure than the ruling price. The thanks of the public are therefore due to Mr. Vogel, who has realised the highest market value for the new issue of our debentures under most unfavorable circumstances. He has managed to float a State loan—one of the most anxious duties that can fall on a Minister —without making the slightest mistake. One mistake committed by a person with extensive borrowing powers is almost sure to be fatal to the whole scheme. Fortunately for the colony, the negotiations were successfully conducted at a time when the money market was in a very unsettled state, and when New Zealand had begun to be looked upon with suspicion. Tlie effect has been to give buoyancy to the debentures of previous issues, and re-establish confidence in New Zealand securities.