MR. LANGTON ON COLONIAL LOANS.

New Zealand Times, Volume XXXIII, Issue 5503, 15 November 1878, Page 3

MR. LANGTON ON COLONIAL LOANS.

Mr, Langton, an ez-Treasurer, has written a paper under the following title :— u Another Loan : A Rejected Contribution to the Melbourne Review. By Edward Langton,—in which he sets forth his views with regard to the coming application to English capitalists for further advances. From a critique on, the essay in the Melbourne Argus we extract the following:— It appears by Mr. Langtou’a statement that the whole public debt of Victoria is £17,071,382, of which very respectable sum £2,614,382 is owing in tho colony, and £14,457,000 has been borrowed in England. The following table showing our position in this respect relatively to the five other great colonies of tho group is interesting;—

In 1876 we placed a 4 per cent, loan at £94 18s. 4d., and at the commencement of July in this year our 4 per cent, debentures were quoted at 97- At the end of that month they had fallen to 95&, in consequence of the dearness of money ; but directly the new loan was announced they fell rapidly till they reached 93, dragging down other Australian securities in their train, "So seriously,” says Mr, Langton, “ were all Australian securities affected, that the Government of New South Wales felt it necessary to withdraw a small loan which bad been applied for, and the London representative of the Victorian banks telegraphed the advice that, in the face of such adverse indications, a new 4 percent. Victorian loan could not be floated at 90.” Mr. Langton contends that there is no room to doubt that investors in England are influenced by considerations of the indebtedness of the various colonies in relation to population. He says : “ Within the last three years four of the colonies have put 4 per cent, loans on the London market, with these results : Net price realised. 1876—Now South Wales .. £92 2 0 1876 Victoria 94 18 4 1877 Queensland 90 17 0 1878 — South Australia .. .. 95 0 0 New Zealand placed a 4J per cent, loan in 1875 at the net price of 93, The price realised for the Now South Wales loan of 1875 was, allowing for the difference in the value of money, hut little less than that obtained for the Victorian loan of the following year. Apart from the consideration of relative indebtedness, there does not appear any reason why Queensland debentures should be worth 4 percent, less than those of Victoria or South Australia. The same remark applies to New Zealand, whose case is still worse ; for 93 for a 4£ per cent, loan is fully 7 per cent, below the last prices obtained by Victoria and South Australia, even though the higher price of money in 1875 is taken into account. Assuming, then, the normal price of Australian 4 per cents, to be about 95, it would seem that, because Queensland is iu debt to the extent of £37 per head, she is mulcted in a sum of £40,000 hard cash on every million she borrows in London ; while New Zealand, because of her still heavier indebtedness, loses £70,000 on every million raised in the same place. An addition of nine millions to the debt of Victoria would bring our national debt up to £26,000,000, and our indebtedness per head to upwards of £3O ; or not far below that of Queensland in 1875. It would, in fact, take Victoria out of the category of colonies with a small indebtedness, and place her in the same with Queensland and New Zealand.”

• — Area Sq. Miles. Imports and Exports. Population Debt. Debt per Head. Victoria N. S. Wales .. S. Australia Queensland .. New Zealand. 88X93 810938 914730 669520 101900 26670000 9300000 7000000 12570000 840000 629776 226677 187100 300075 £ 17071382 11759519 3837100 6948586 20618111 £ 20 C 0 13 13 0 17 0 0 37 2 0 61 13 0