THE LOAN NEGOTIATION.

New Zealand Times, Volume XXXIII, Issue 5370, 13 June 1878, Page 3

THE LOAN NEGOTIATION.

(From the Lyttdton Times, June 6.) The successful launching of the new loan is unprecedented in the history of New Zealand loans. It is a welcome instance of the advantages arising from the connection between the colony and the Bank of England, which the Agent-General has established with such commendable foresight and painstaking ability. Viewed in the abstract, the favorable reception of a New Zealand loan ought not to be a source of astonishment to anyone. To a thinking mind the astonishing thing would be an ill reception of such a loan. For when foreign Governments experience little or no difficulty in raising money to be burnt away in powder by the hundred million, to be used for desolating the face of the earth, and the destruction of life, commerce, and the arts, it ought to be strange if a fine colony were unable to borrow money for the development of its magnificent resources. But the matter has not been always in the domain of reason founded on facts. The facts were to a great extent unknown, and reason largely obscured by the prejudices of ignorance and narrow views. Colonies possessing excellent sources of prosperity have, for this reason, always found borrowing in the money market a far more difficult and delicate operation than it ought to have been. Their representatives had to watch for the favorable moment with the most patient vigilance. The moment found them a prey to nervous terrors of every kind, and frequently left them with a lower price for their bonds than they had a right to expect. In the case of this colony, especial care has always been exercised. Amidst the ignorance and prejudice prevailing with regard to New Zealand matters, there was always a small number who, being more enlightened than their fellows, believed in the excellence of the investment offered. But it always took time to reach their pockets, or through their means the pockets of other investors. They also naturally profited by their exceptional position, and thus loans were floated, but their floating was accompanied by explanatory comments. According to these the prices were satisfactory, but only to be considered so after a great many things had been taken into consideration.

With regard to New Zealand all this, or nearly all this, has been changed. ■ It is not

too much to say that the valuable services of the Agent-General have been mainly instrumental in securing this desirable result. Not many years ago, when the loan of 1874-75 was about to be launched, an opinion existed in Great Britain that New Zealand was going too fast ; that her credit was strained to the utmost, that her resources, though good, could not develop quickly enough to enable her to bear the burdens imposed upon her on their account, and that her financial collapse was not improbable. At this critical time a most damaging article appeared in “ Fraser’s Magazine,” which threatened, if uucontradicted, to take the financial world by storm. It was the climax of the party ill-feeling and discontent which had filled the ear of the British public with melancholy croakings and fierce diatribes. Sir Julius Vogel, then in London, was equal to the occasion, and quietly exposed the hollowness and extreme unfairness of the reasons urged in support of the attack in the columns of the magazine in which they had appeared. As a consequence the loan prospered. Since then he has with voice and pen continually defended the colony, alike from the active hostility of unfriendly critics, and the faint praise of friends not sufficiently well informed to entertain decided opinions of a justly favorable character. It is more particularly since he has filled the office of AgentGeneral that he has exerted himself in this direction. It was indeed well said of him by his colleagues in the Government, when contemplating his appointment, that he was the best man who could be found for the office. The new duties that he has added to it will he a terror to his successors. The columns of newspapers and magazines have teemed with contributions from his pen, and many public occasions have been signalised by remarkable speeches, in which he has claimed from public opinion a just estimate of the colony’s true position. When the results of the great Public Works policy were yet in the future, he effectually disposed of the jeremiads of the prophets of woe, many of them colonists blinded by party feelings, who should have known better, while ho allowed full weight to the prudential arguments of those who thought there was reason to fear from colonial extravagance. As time wore on, the results began to present themselves. _At last they have reached a stage which justifies the boldness of the policy of 1870. These the Agent-General has kept steadily before public opinion, which he has carried with him. The introduction of the loan of 1874-75 marked the beginning of this career of usefulness; and the loan of 1878 was preceded _ by the brightest specimen of his talent which that career has produced. So much most readers of his admirable. lecture ou the colony, read at the last meeting of the Colonial Institute, will allow. The increasing favorable tone of the leading journals has for some time been the measure of his success.

Of its completeness the large and speedy application for the new loan is the greatest, as it is the surest sign. The published statistics and commercial and industrial prosperity of New Zealand would, no doubt, have produced their own effect on the money market without any literary or oratorical aid from Sir Julius Vogel; for the monied interest, whatever it may be at first, is always eventually just in its opinions. But the rapidity of the effect in this instance is mainly owing to his energetic exertions. The success of the loan is to him a double credit. It shows that not only did he know how to make public opinion generally favorable to the colony, but that he secured the best method for appealing to the public pocket on the special occasion of the issue of a new loan.

It is now abundantly clear that the credit of the colony is excellent. The public creditor has shown that he has the greatest confidence in its resources. It will be most reassuring to colonists to feel that though the public burdens they bear are heavy, they are not considered as beyond their ability to bear them. In short, the facilities for borrowing are now very much increased. The colonial Legislature has been long divided in opinion as to the expediency of increasing the colonial indebtedness, principally for the reason that the credit of the colony was considered by many of its members to have been strained.to the utmost. As the success of the new loan has swept away that reason, the Legislature may fairly be expected to be unanimous in favor of progress —and borrowing. It must not be forgotten that the excellent credit of the colony is a power in their hands, which may be used for good or evil. If the accommodating investor’s monies are used recklessly—and the temptation to do so is great while the penalty is remote—then there must be widespread disaster. Some one has said that it is impossible to kill this fine country. That is true, but it is equally true that it is not by any means impossible to injure the best interests of this country, fine as it is, to a very great extent. On tbe other hand, if the money is wisely employed ; if foresight and economy are used in the construction of public works, if immigration is liberally fostered, and settlement vigorously promoted, then—the results of the last seven years justify the assertion—the rapidity and soundness of future development will be such as to astonish most observers. We hope that our best public men will combine in a firm effort to use tbe power of the improved public credit for good and not for evil. They have but to be calm and consistent to secure the grandest results.